TY - JOUR
T1 - R&D-based economic growth in a supermultiplier model
AU - Nomaler, Önder
AU - Spinola, Danilo
AU - Verspagen, Bart
N1 - Publisher Copyright:
© 2021
PY - 2021/8/3
Y1 - 2021/8/3
N2 - We investigate how economic growth in a demand-driven economy with semi-endogenous productivity growth can be compatible with a stable employment path. Our model uses a Sraffian supermultiplier (SSM), and we endogenize the growth rate of autonomous demand, and semi-endogenize productivity growth. The basic model has a steady state that is consistent with a stable employment rate, and in which the growth rate is determined by R&D expenditures. Consumption smoothing (between periods of high and low employment) by workers is the mechanism that ensures that demand keeps up with productivity growth and that the growing economy is stable. We also introduce a version of the model where the burden for stabilization falls upon government fiscal policy. This also yields a stable growth path, although the parameter restrictions for stability are more demanding in this case.
AB - We investigate how economic growth in a demand-driven economy with semi-endogenous productivity growth can be compatible with a stable employment path. Our model uses a Sraffian supermultiplier (SSM), and we endogenize the growth rate of autonomous demand, and semi-endogenize productivity growth. The basic model has a steady state that is consistent with a stable employment rate, and in which the growth rate is determined by R&D expenditures. Consumption smoothing (between periods of high and low employment) by workers is the mechanism that ensures that demand keeps up with productivity growth and that the growing economy is stable. We also introduce a version of the model where the burden for stabilization falls upon government fiscal policy. This also yields a stable growth path, although the parameter restrictions for stability are more demanding in this case.
KW - Economic growth model
KW - Research and Development (R&D)
KW - Sraffian supermultiplier
UR - https://www.open-access.bcu.ac.uk/11938/
U2 - 10.1016/j.strueco.2021.07.002
DO - 10.1016/j.strueco.2021.07.002
M3 - Article
AN - SCOPUS:85112569210
SN - 0954-349X
VL - 59
SP - 1
EP - 19
JO - Structural Change and Economic Dynamics
JF - Structural Change and Economic Dynamics
ER -