Working Paper BETA #2023-17

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Title : Open Science vs. Mission-oriented Policies and the Long-run Dynamics of Integrated Economies: An Agent-based Model with a Kaldorian Flavour

Author(s) : Andrea Borsato, Andre Lorentz

Abstract : This paper offers a contribution to the literature on science policies and on the possible trade-off that might arise between broad spectrum science-technology policies and missionoriented programs. We develop a multi-country, multi-sectoral agent-based model of economic dynamics with endogenous structural change that represents a small-scale monetary union. Findings are threefold. Firstly, science policies from national governments, even when symmetric, act as a source of growth divergence across countries. Secondly, even if economic growth is largely driven by the sectors with absolute advantages, having at least a little flow of open science investments is sufficient for the other industries to survive and innovate, hence preserving the bio-diversity of the economic structure. Thirdly, science policy alone is a sufficient means to break monopolistic tendencies, trigger competition and reduce income inequality. Still, such results are conditioned to the flow of open science. Yet, the working of the model suggests that supply-side science policies should be paired with demand-side policies for the wide re-organisation of consumption habits, if grand societal challenges are to be met.

Key-words : Science policies, Structural and technical change, Economic growth.

JEL Classification : E11, E32, O33, O41