Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/282346 
Year of Publication: 
2023
Series/Report no.: 
CESifo Working Paper No. 10658
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
We develop an endogenous growth model to quantify how permanent structural policy changes that enhance the fiscal policy mix, markets' functioning, and public institutions' quality affect long-term growth and welfare. The reforms include increased public investment, reduced market power through lower price markups for patents and intermediate goods, and an improved institutional framework that reduces rent-seeking. All reforms, except lower patent prices, lead to per-capita output and welfare gains along the transition and balanced growth paths. In contrast, a lower markup in the research sector hurts innovation, leading to lower growth over both paths and welfare losses along the transition.
Subjects: 
endogenous growth
structural policy
welfare
JEL: 
H30
O41
O43
Document Type: 
Working Paper
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