Liberating Supply-Fiscal Policy and Technological innovation in a Multicountry Model
June 1, 1998
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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.
Subject: Expenditure, Fiscal policy, National accounts, Private consumption, Production, Public debt, Total factor productivity
Keywords: country TFP, Econometric Models, endogenizing TFP, exogenous TFP, Global, net present value, Private consumption, R&D, R&D expenditure, Technological Progress, Total factor productivity, total factor productivity equation, WP
Pages:
26
Volume:
1998
DOI:
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Issue:
095
Series:
Working Paper No. 1998/095
Stock No:
WPIEA0951998
ISBN:
9781451851793
ISSN:
1018-5941
