We use a specific-factor model to examine the conditions under which policy-makers are able to increase aggregate production of high-tech goods by production or R&D-subsidies in the short and long run. The difficulties for the policy-makers in designing a subsidy scheme that succeeds in...

We use a specific-factor model to examine the conditions under which policy makers are able to increase aggregate production in high- tech goods by production or R&D-subsidies in the short and long-run.