R&D-based Economic Growth in a Supermultiplier Model

Önder Nomaler, Danilo Spinola and Bart Verspagen

No 9, CAFE Working Papers from Centre for Accountancy, Finance and Economics (CAFE), Birmingham City Business School, Birmingham City University

Abstract: We investigate how economic growth in a demand-led economy with semi-endogenous productivity growth can be compatible with a stable employment path. Our model uses a Sraffian supermultiplier (SSM), and we endogenize the growth rate of autonomous demand, and semi-endogenize productivity growth. The basic model has a steady state that is consistent with a stable employment rate. Consumption smoothing (between periods of high and low employment) by workers is the mechanism that keeps the growing economy stable. We also introduce a version of the model where the burden for stabilization falls upon government fiscal policy. This also yields a stable growth path, although the parameter restrictions for stability are more demanding in this case.

Keywords: Economic growth model; Sraffian supermultiplier; Research and Development (R&D) (search for similar items in EconPapers)
Date: 2021-01-12
New Economics Papers: this item is included in nep-cwa, nep-gro, nep-ino and nep-mac
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Citations: View citations in EconPapers (8)

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Journal Article: R&D-based economic growth in a supermultiplier model (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:akf:cafewp:9

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