This paper presents an endogenous growth model in which the research activity is financed by intermediaries that are able to reduce the incidence of the researcher's moral hazard. Financial activity is growth promoting because it makes research productivity higher. It is found that a subsidy to...

This paper presents an endogenous growth model in which the research activity is financed by intermediaries that are able to reduce the incidence of researcher's moral hazard. It is shown that financial activity is growth promoting because it increases research productivity. It is also found...

This paper studies the effects of different types of research policy on economic growth. We find that while tax incentives to private research, public funding of private projects, and basic research performed at public institutions have unambiguously positive effects on economic growth,...