R&D-based Economic Growth in a Supermultiplier Model

Nomaler, Önder and Spinola, Danilo and Verspagen, Bart (2021) R&D-based Economic Growth in a Supermultiplier Model. Working Paper 9. Centre for Applied Finance and Economics (CAFE), Birmingham City Business School, Birmingham City University. (Submitted)

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Abstract

We investigate how economic growth in a demand-led 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. Consumption smoothing (between periods of high and low employment) by workers is the mechanism that keeps the growing economy 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.

Item Type: Monograph (Working Paper)
Identification Number: 9
Date: 12 January 2021
Uncontrolled Keywords: Economic growth model, Sraffian supermultiplier, Research and Development (R&D)
Subjects: L100 Economics
Divisions: Faculty of Business, Law and Social Sciences > Birmingham City Business School > Centre for Applied Finance and Economics
Faculty of Business, Law and Social Sciences > Birmingham City Business School > Department of Accounting, Finance and Economics
Depositing User: Danilo Sartorello Spinola
Date Deposited: 12 Jan 2021 10:25
Last Modified: 12 Jan 2021 12:06
URI: http://www.open-access.bcu.ac.uk/id/eprint/10718

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