Liberating Supply: Fiscal Policy and Technological Innovation in a Multicountry Model
David Coe () and
Douglas Laxton ()
MPRA Paper from University Library of Munich, Germany
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)
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https://mpra.ub.uni-muenchen.de/8596/1/MPRA_paper_8596.pdf original version (application/pdf)
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:pra:mprapa:8596
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