Asset Bubbles, Technological Innovation and Economic Growth
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| Title | Asset Bubbles, Technological Innovation and Economic Growth
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| Author | Chen Langnan and Wang Shengquan |
| Organization | Lingnan(University) College, Sun Yat-sen University |
| Email | lnscln@mail.sysu.edu.cn；wsq279@126.com |
| Key Words | Asset Bubbles; Technological Innovation; Economic Growth; FF-TVP-SV-VAR; TVAR |
| Abstract | This paper investigates the relation between asset bubbles, technological innovation and economic growth from the perspective of both theoretical modeling and empirical study. Theoretically, we build a Schumpeterian economic growth model, where entrepreneurs face the financial constraint when financing the R&D. As a consequence, the supply will be greater than demand for capital. In this case, the asset bubbles could boost the R&D expenditure and improve the probability of successful R&D. Empirically, we employ the monthly data covering a period from 2000 to 2016 and utilize the FF-TVP-SV-VAR and TVAR models to examine the relation between asset bubbles, technological innovation and economic growth respectively. We find that the asset bubbles can boost the technology innovation subject to the financial constraint. In addition, we identify the two threshold values of financial constraint. |
| Serial Number | WP1432 |
| Time | 2019-11-07 |
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