Liberating Supply: Fiscal Policy and Technological Innovation in a Multicountry Model

Tamim A Bayoumi, David Theodore Coe () and Douglas Laxton

MPRA Paper from University Library of Munich, Germany

Abstract: This paper examines how endogenizing technological progress in a multicountry macroeconometric model affects the analysis of fiscal policies. It uses an expanded version of the IMF's multicountry model, MULTIMOD, in which total factor productivity (TFP) is endogenized as a function of domestic research and development (R&D) expenditures, R&D expenditures of trading partners, and trade. Compared with the standard version of the model with exogenous TFP, fiscal policies have much larger and long-lived effects on the domestic economy and on other countries.

Keywords: Technological progress; research and development; econometric models (search for similar items in EconPapers)
JEL-codes: O30 O33 O40 (search for similar items in EconPapers)
Date: 1998-06
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Related works:
Working Paper: Liberating Supply-Fiscal Policy and Technological Innovation in a Multicountry Model (1998)
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Persistent link: http://EconPapers.repec.org/RePEc:pra:mprapa:8596

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