Stimulating Long-Term Growth and Welfare in the U.S

James Malley, Apostolis Philippopoulos and Jim Malley

No 10658, CESifo Working Paper Series from CESifo

Abstract: We develop an endogenous growth model to quantify how permanent structural policy changes that enhance the fiscal policy mix, markets’ functioning, and public institutions’ quality affect long-term growth and welfare. The reforms include increased public investment, reduced market power through lower price markups for patents and intermediate goods, and an improved institutional framework that reduces rent-seeking. All reforms, except lower patent prices, lead to per-capita output and welfare gains along the transition and balanced growth paths. In contrast, a lower markup in the research sector hurts innovation, leading to lower growth over both paths and welfare losses along the transition.

Keywords: endogenous growth; structural policy; welfare (search for similar items in EconPapers)
JEL-codes: H30 O41 O43 (search for similar items in EconPapers)
Date: 2023
New Economics Papers: this item is included in nep-dge, nep-gro and nep-pbe
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Working Paper: Stimulating long-term growth and welfare in the U.S (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_10658

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