The advancement of the knowledge frontier is crucial for technological innovation and human progress. Using novel data from the setting of mathematics, this paper establishes two results. First, we document that individuals who demonstrate exceptional talent in their teenage years have an...

How important is foreign knowledge for domestic innovation outcomes? How is this relation shaped by globalization and the attendant intensification of international competition? Our empirical approach extends the previous literature by analyzing a large panel comprising industries in both...

We explore the role of business services in knowledge accumulation and growth and the determinants of knowledge diffusion including the role of distance. A continuous-time model is estimated on several European countries, Japan, and the United States. Policy simulations illustrate the benefits...

The paper considers the issue of whether a supranational fiscal policy in Europe is needed, and, if so, what responsibilities it should undertake. The literature on endogenous growth and the principle of subsidiarity suggest that such a policy should be limited to externalities or economies of...

This paper extends the Schumpeterian model of creative destruction by allowing followers' cost of innovation to increase in their technological distance from the leader. This assumption is motivated by the observation the more technologically ad- vanced the leader is, the harder it is for a...

The transition from a command to a market economy requires profound reforms of the tax system. Such a transition will put downward pressures on the level of taxation at a time when public expenditure remains high. This paper outlines the main characteristics of the tax systems in...

This paper analyzes budgetary subsidy policy issues that arise when centrally planned economies move toward a market economy. The analysis suggests that subsidy reduction, to be successful, has to be embedded into an overall economic reform program and that during the program’s execution,...

The IMF Working Papers series is designed to make IMF staff research available to a wide audience. Almost 300 Working Papers are released each year, covering a wide range of theoretical and analytical topics, including balance of payments, monetary and fiscal issues, global liquidity, and...

How much do firms benefit from foreign R and D and through what channel? We construct a global network of corporate innovation using more than 1.5 million patents granted to firms in OECD countries. We test the 'international technology sourcing' hypothesis that foreign innovation activities tap...