This paper contributes to the endogenous versus semi-endogenous growth debate by establishing that semi-endogenous growth is more general than endogenous growth in a two-R&D-sector growth model. It is demonstrated that endogenous growth requires two "knife-edge" conditions of parameters. This...

One of the most well-known empirical regularities in the R&D-productivity literature is the existence of substantial under-investment in R&D. This strongly suggests that government should actively promote research activities. However, the so-called "quality-ladders" models of endogenous...