Liberating Supply-Fiscal Policy and Technological innovation in a Multicountry Model

Douglas Laxton, Tamim Bayoumi and David Coe ()

No 1998/095, IMF Working Papers from International Monetary Fund

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: WP; net present value; Technological Progress; R&D; Econometric Models; endogenizing TFP; R&D expenditure; total factor productivity equation; country TFP; exogenous TFP; Total factor productivity; Private consumption; Global (search for similar items in EconPapers)
Pages: 26
Date: 1998-06-01
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Working Paper: Liberating Supply: Fiscal Policy and Technological Innovation in a Multicountry Model (1998)
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Persistent link: https://EconPapers.repec.org/RePEc:imf:imfwpa:1998/095

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