Bayoumi, Tamim and Coe, David T. and Laxton, Douglas (1998): Liberating Supply: Fiscal Policy and Technological Innovation in a Multicountry Model.
Download (1MB) | Preview
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.
|Item Type:||MPRA Paper|
|Original Title:||Liberating Supply: Fiscal Policy and Technological Innovation in a Multicountry Model|
|Keywords:||Technological progress; research and development; econometric models|
|Subjects:||O - Economic Development, Innovation, Technological Change, and Growth > O3 - Innovation ; Research and Development ; Technological Change ; Intellectual Property Rights > O30 - General
O - Economic Development, Innovation, Technological Change, and Growth > O3 - Innovation ; Research and Development ; Technological Change ; Intellectual Property Rights > O33 - Technological Change: Choices and Consequences ; Diffusion Processes
O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O40 - General
|Depositing User:||David/T Coe|
|Date Deposited:||07. May 2008 14:44|
|Last Modified:||17. Mar 2015 14:13|
Aghion, Philippe, and Peter Howitt, 1992, "A Model of Growth Through Creative Destruction," Econometrica, Vol. 60, (March), pp. 323-51.
Bayoumi, Tamim, David T. Coe, and Elhanan Helpman, 1998, "R&D Spillovers and Global Growth," Journal ofInternational Economics, Vol 47 (April).
Blanchard, Oliver, 1985, "Debt, Deficits, and Finite Horizons," Journal of Political Economy, Vol. 93 (April), pp. 223-47.
Buiter, William H., 1988, "Death, Birth, Productivity Growth and Debt Neutrality," Economic Journal, Vol. 98 (June), pp. 279-93.
Cass, David, 1965, "Optimum Growth in an Aggregative Model of Capital Accumulation," Review ofEconomic Studies, Vol. 32 (July), pp. 233-40.
Coe, David T., and Elhanan Helpman, 1995, "International R&D Spillovers," European Economic Review, Vol. 39 (May), pp. 859-87.
--, and Alexander W. Hoffmaister, 1997, ''North-South R&D Spillovers," Economic Journal, Vol. 107 (January) pp. 134-139.
Eaton, Jonathan, and Samuel Kortum, 1996, "Trade in Ideas: Patenting and Productivity in the OECD," Journal of International Economics, Vol. 40 (May), pp. 251-78.
Ford, Robert, and Douglas Laxton, 1995, "World Public Debt and Real Interest Rates," IMF Working Paper 95/30 (Washington: International Monetary Fund).
Griliches, Zvi, 1988, "Productivity Puzzles and R&D: Another Nonexplanation," Journal of Economic Perspectives, Vol. 2 (Fall), pp. 9-21.
Grossman, Gene M., and Elhanan Helpman, 1991, Innovation and Growth in the Global Economy (Cambridge, Massachusetts and London: MIT Press).
Helliwell, John F., 1995, "Modeling the Supply Side: What Are the Lessons from Recent Research on Growth and Globalization?" paper presented at meeting of Project Link, (South America).
International Monetary Fund, 1997, World Economic Outlook, October 1997: A Survey by the Staff of the InternationalMonetary Fund, World Economic and Financial Surveys (Washington).
Juillard, Michel, and Douglas Laxton, 1996, "A Robust and Efficient Method for Solving Nonlinear Multicountry Rational Expectations Models," IMF Working Paper 96/106 (Washington: International Monetary Fund).
--, Peter McAdam, and Hope Pioro, 1998, "An Algorithm Competition: First-Order Iterations Versus Newton-Based Techniques," Journal of Economic Dynamics and Control.
Keller, Wolfgang, 1998, "Are International R&D Spillovers Trade-Related? Analyzing Spillovers Among Randomly Matched Trade Partners," European Economic Review, Vol. 42, pp. 1469-81.
Laxton, Douglas and others, 1998, MUL TIMOD Mark Ill: The Core Dynamic and Steady¬State Models, IMF Occasional Paper No. 164 (Washington: International Monetary Fund).
Lichtenberg, Frank R., and Bruno van Pottelsberghe de la Potterie, 1998, "International R&D Spillovers: A Comment," European Economic Review, Vol 42, pp. 1483-91).
Masson, Paul, Steven Symansky, and Guy Meredith, 1990, MULTIMOD Mark 11: A Revised and Extended Model, IMF Occasional Paper No. 71 (Washington: International Monetary Fund).
McKibbin, Warwick 1., and Jeffrey D. Sachs, 1991, Global Linkages: Macroeconomic Interdependence and Cooperation in the World Economy (Washington: Brookings Institution).
Mohnen, Pierre A, 1994, "The Econometric Approach to R&D Externalities," Cahiers de Recherche du Departement des Sciences Economiques de l'UQAM No. 9408 (Montreal: University of Quebec at Montreal).
Nadiri, M. Ishaq, 1993, "Innovations and Technological Spillovers," NBER Working Paper No. 4423 (Cambridge, Massachusetts: National Bureau of Economic Research).
Organization for Economic Cooperation and Development, 1995a, Basic Science and Technology Statistics (Paris: OECD).
Romer, Paul M., 1990, "Endogenous Technological Change," Journal ofPoliticalEconomy, Vol. 98 (October), pp. S71-S102.
Solow, Robert M., 1956, "A Contribution to the Theory of Economic Growth," Quarterly Journal of Economics, Vol. 70 (February), pp. 65-94.
Tanzi, Vito, and Domenico Fanizza, 1995, "Fiscal Deficit and Public Debt in Industrial Countries, 1970-1994," IMF Working Paper 95/49 (Washington: International Monetary Fund).
Tobin, James, 1969, "A General Equilibrium Approach to Monetary Theory," Journal of Money, Credit and Banking, Vol. 1 (February), pp. 15-29.
Weil, Philippe, 1989, "Overlapping Families of Infinitely-Lived Agents," Journal of Public Economics, Vol. 38 (March), pp. 183-98.