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on Financial Development and Growth |
| By: | Edward C. Prescott; Timothy J. Kehoe |
| Abstract: | Three of the arguments made by Temin (2008) in his review of Great Depressions of the Twentieth Century are demonstrably wrong: that the treatment of the data in the volume is cursory; that the definition of great depressions is too general and, in particular, groups slow growth experiences in Latin America in the 1980s with far more severe great depressions in Europe in the 1930s; and that the book is an advertisement for the real business cycle methodology. Without these three arguments — which are the results of obvious conceptual and arithmetical errors, including copying the wrong column of data from a source — his review says little more than that he does not think it appropriate to apply our dynamic general equilibrium methodology to the study of great depressions, and he does not like the conclusion that we draw: that a successful model of a great depression needs to be able to account for the effects of government policy on productivity. |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedmsr:418&r=fdg |
| By: | Brita Bye, Taran Fæhn, and Leo A. Grünfeld (Statistics Norway) |
| Abstract: | Research and development (R&D) play a pivotal role for innovation and productivity growth, and knowledge spillovers can make the case for public support to private R&D. In small and open economies, absorption of foreign knowledge through exports and imports can be even more decisive for economic growth than domestic innovation. This macro economic analysis investigates how policies should be formed in order to reap the largest productivity effects, when both these sources of growth interplay. In particular, the firms’ capacity to absorb knowledge from abroad depends on domestic R&D, and this reinforces the efficiency arguments for stimulating R&D. We find that from a welfare perspective, export promotion of R&D-based technologies proves slightly more efficient than R&D support. |
| Keywords: | Absorptive capacity; Computable general equilibrium model; Endogenous growth; Research and Development; Spillovers; Two faces of R&D. |
| Date: | 2008–12 |
| URL: | http://d.repec.org/n?u=RePEc:ssb:dispap:572&r=fdg |