We study the cyclicality of public R&D in 28 OECD countries (1995-2017). While procyclical on average, public R&D reacts asymmetrically over different phases of the business cycle and becomes acyclical during recessions. It is also heterogeneous across countries: Innovation leaders and followers...

A Real Business Cycle model of the UK is developed to account for the behaviour of UK nonstationary macro data. The model, when tested by the method of indirect inference, can explain the behaviour of main variables (GDP, real exchange rate, real interest rate). We use it to explain how 'crisis'...