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Since the financial crisis in 2008, slow growth has riddled Europe and the Covid-19 pandemic is amplifying the challenge. Promoting economic growth and transforming to a more knowledge-based industrial structure will be high on the agenda for the coming decades. We study how more and better...
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government provide incentives for innovation in a fiscally sustainable way? We address this question by examining the Ramsey … problem of finding optimal tax and subsidy schemes in a model in which growth is endogenously sustained by risky innovation …. We characterize the shadow value of growth and entry in the innovation sector. We find that a profit tax is required to …
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We develop a tractable dynamic model of productivity growth and technology spillovers that is consistent with the emergence of real world empirical productivity distributions. Firms can improve productivity by engaging in in-house R\&D, or alternatively, by trying to imitate other firms'...
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