Micro-uncertainty and growth

In this paper idiosyncratic uncertainty is introduced in a model of economic growth with an increasing variety of intermediate products. Both the costs of producing intermediate products and their quality are uncertain for all producers at all times. Using the property of the model that the number of intermediate firms is infinite, uncertainty cancels out in the aggregate. Furthermore, the magnitude of uncertainty has several deterministic effects on long-term economic growth. First, uncertainty causes growth in the heterogeneity of intermediate firms. As heterogeneity grows, the number of very efficient intermediate firms increases. Depending on the degree of competition and the returns to intermediate products, these firms can attract an increasing share of demand by the final sector. This makes final production become more efficient over time. Second, uncertainty changes the rate at which new intermediates are introduced by its effect on the efficiency of final production and by a real-option effect.economics of technology ;

Schooling inequality and the rise of research

During the last twenty years the share of researchers in the workforce has been rising in OECD countries. The consistency of this pattern suggests that it is not a transitional phenomenon. This paper demonstrates that the rise of research can occur in the steady state when schooling inequality is declining. Comparative static analysis of a semi-endogenous growth model with a continuous distribution of skills shows that a reduction in skill inequality can have a variety of effects, which includes a rising share of researchers. Additionally, the height of the growth rate of mean educational attainment is shown to have a positive effect on the proportion of researchers in the workforce, without causing it to grow.Schooling inequality; Economic growth

The Welfare Effects of Economic Integration when Products are Patented

This paper presents a model of economic growth where products are invented and patented, and where production involves fixed costs at the location of the plant. The model is used to assess the effects of instantaneous integration of a small, autarkic country into a larger economy on a) consumer welfare and b) the distribution of income. Consumer welfare in the small country rises immediately because of newly available products. Additionally, the welfare of all consumers rises due to economies of scale at the firm level. These latter benefits are gradually replaced by benefits stemming from newly invented products. The distribution of income changes due to a) the asymmetric distribution of patent ownership and b) changes in the ratio’s of skilled to unskilled workers.Economic integration; Income distribution; Product variety

A note on Shannon’s entropy as an index of product variety

This note shows that the antilog of Shannon’s entropy is a suitableindex of product variety for three reasons. First, for symmetricproduct types it is equal to the number of product types. Second, disaggregationof the underlying product set always leads to an increasein measured product variety. Third, the introduction or disappearanceof a marginal type does not cause a discrete change in the variety index.These properties hold for a class of weights that includes, but isnot limited to, frequencies.mathematical economics and econometrics ;

Innovation policy; Europe or the member states?

Innovation seldom has purely domestic causes and consequences, but how can a European innovation policy complement or substitute national policies? Taking the subsidiarity principle as a starting point, this report discusses the economic rationale of a European innovation policy. Explorative empirical analysis suggests that public R&D and public funding of private R&D are subject to economies of scale and external effects. This is an argument in favour of a European innovation policy but amongst other things, the heterogeneity in social economic objectives on public R&D spending between Member States pleas for national government involvement. In addition, there are scale economies in the protection of intellectual property and in the development of standards. We conclude that a European innovation policy could have, or already has, substantial benefits over purely national policy in these areas. With respect to innovation policies targeted at SMEs, we do not find economies of scale or external effects. It seems to be efficient that these policies are mainly conducted at the national level.

The internal market and the Dutch economy: implications for trade and economic growth

This paper estimates the effects of the formation and development of the Internal Market (IM) in the European Union on income per capita for the EU and specifically for the Netherlands, since its appearance in 1958. It does so in two stages. First, gravity equations are estimated to identify the impact of the IM on bilateral trade in goods and services and Foreign Direct Investment (FDI). The results of the first stage show that 8 percent of the exports and imports of goods by the EU members can be attributed to the IM. For services trade, the IM effects are somewhat smaller: about 5 percent of EU members' services trade. The IM has a bigger impact on FDI stocks. For the Netherlands, the IM has about twice as large an effect on trade in goods compared to the results for the EU. For services trade and FDI, the effects are in line with the results for the EU. Second, the trade-enhancing effect of IM on GDP is estimated. For 2005, IM integration of goods markets has yielded 2 to 3 percent higher per capita income in the EU, and about 4 to 6 percent higher income per capita in the Netherlands. If the current level of integration effects with respect to the IM for goods and services persists, GDP per capita in the long run will increase by about 10 percent in the EU and about 17 percent in the Netherlands.

Schooling inequality and the rise of research

During the last twenty years the share of researchers in the workforce has been rising in OECD countries. In the same period, the distribution of schooling has become more equal. This paper proposes that the rise in the proportion of researchers is caused by the decline in schooling inequality. In particular, comparative static analysis of a semi-endogenous growth model demonstrates that a rising proportion of researchers can be a steady state phenomenon when schooling inequality is declining over time. This outcome can be accompanied by a rise in the wages of high-skilled labor compared to low-skilled labor.

Recombinant innovation and the boundaries of the firm

There is considerable interest in understanding how important market frictions are in stifling the transmission of ideas from one firm to another. Although the theoretical literature emphasizes the importance of these frictions, direct empirical evidence on them is limited. We use comprehensive patent data from the European Patent Office and a multiple spells duration model to provide estimates that suggest that they are substantial. It is around 30% more costly to successfully discover and utilize new ideas created in another firm than in your own. This compares to the increased costs of accessing new ideas across national borders of around 5%, and across technologies of around 20%. These result point towards substantial imperfections in the market for technology

Research in energy conversion technologies: Policy instruments and uncertainty

In this paper, the effects of uncertainty and of various policy instruments on the lengthand attractiveness of private research projects are studied. Research expenditure can beregained from quasi-rents that are earned by exploiting patents on the fruits of research.The accumulation of knowledge is modeled as a Poisson process. Within the context ofthe model, we show that firms shorten the duration of research projects when uncertaintyin knowledge accumulation increases or when, for example, the validity of patents isprolonged. The underlying mechanisms are due to Jensen™s Inequality and a real-optioneffect. Furthermore, we develop a smooth pasting condition for a class of Poissonprocesses.economics of technology ;

Endoscopic full-thickness resection of T1 colorectal cancers:a retrospective analysis from a multicenter Dutch eFTR registry

Background Complete endoscopic resection and accurate histological evaluation for T1 colorectal cancer (CRC) are critical in determining subsequent treatment. Endoscopic full-thickness resection (eFTR) is a new treatment option for T1 CRC<2cm. We aimed to report clinical outcomes and short-term results. Methods Consecutive eFTR procedures for T1 CRC, prospectively recorded in our national registry between November 2015 and April 2020, were retrospectively analyzed. Primary outcomes were technical success and R0 resection. Secondary outcomes were histological risk assessment, curative resection, adverse events, and short-term outcomes. Results We included 330 procedures: 132 primary resections and 198 secondary scar resections after incomplete T1 CRC resection. Overall technical success, R0 resection, and curative resection rates were 87.0% (95% confidence interval [CI] 82.7%-90.3%), 85.6% (95%CI 81.2%-89.2%), and 60.3% (95%CI 54.7%-65.7%). Curative resection rate was 23.7% (95%CI 15.9%-33.6%) for primary resection of T1 CRC and 60.8% (95%CI 50.4%-70.4%) after excluding deep submucosal invasion as a risk factor. Risk stratification was possible in 99.3%. The severe adverse event rate was 2.2%. Additional oncological surgery was performed in 49/320 (15.3%), with residual cancer in 11/49 (22.4%). Endoscopic follow-up was available in 200/242 (82.6%), with a median of 4 months and residual cancer in 1 (0.5%) following an incomplete resection. Conclusions eFTR is relatively safe and effective for resection of small T1 CRC, both as primary and secondary treatment. eFTR can expand endoscopic treatment options for T1 CRC and could help to reduce surgical overtreatment. Future studies should focus on long-term outcomes