Liberating Supply-Fiscal Policy and Technological innovation in a Multicountry Model
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Summary:
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.
Series:
Working Paper No. 1998/095
Subject:
Expenditure Fiscal policy National accounts Private consumption Production Public debt Total factor productivity
English
Publication Date:
June 1, 1998
ISBN/ISSN:
9781451851793/1018-5941
Stock No:
WPIEA0951998
Pages:
26
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