Losers and losses of COVID-19: a directed technical change analysis with fiscal and monetary policies

Oscar Afonso ()
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Oscar Afonso: University of Porto

Economic Change and Restructuring, 2023, vol. 56, issue 3, No 15, 1777-1821

Abstract: Abstract We develop a directed technical change growth model with both public and private sectors. Due to the COVID-19 pandemic, labor productivity and R &D activity in the private sector are considered to have a negative shock. The former shock causes an immediate fall in the private premium, which can be reversed during transition dynamics towards the steady-state. Fiscal policies are materialized in direct and indirect R &D subsidies, and the monetary policies consist of relaxing cash-in-advance restrictions. An appropriate fiscal policy, together or not with monetary policy, can restore the pre-shock situation. Monetary policy is reinforced in the presence of monetary-transaction costs on consumption and of money-in-the-utility function.

Keywords: Public and private sectors; Fiscal and monetary policies; Technological-knowledge gap; Wage inequality; Numerical computations (search for similar items in EconPapers)
JEL-codes: C63 E52 E62 J31 O31 O33 O38 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (1)

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DOI: 10.1007/s10644-023-09486-9

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