Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/157312
Authors: 
Donadelli, Michael
Grüning, Patrick
Year of Publication: 
2017
Series/Report no.: 
SAFE Working Paper Series 171
Abstract: 
We study the general equilibrium implications of different fiscal policies on macroeconomic quantities, asset prices, and welfare by utilizing two endogenous growth models. The expanding variety model features only homogeneous innovations by entrants. The Schumpeterian growth model features heterogeneous innovations: "incremental" innovations by incumbents and "radical" innovations by entrants. The government levies taxes on labor income and corporate profits and supplies subsidies to consumption, capital investment, and investments in research and development by entrants and, if applicable, incumbents. With these models at hand, we provide new insights on the interplay of innovation dynamics and fiscal policy.
Subjects: 
endogenous growth
asset pricing
government
fiscal policy
heterogeneous innovation
JEL: 
E22
G12
H20
I30
O30
Document Type: 
Working Paper

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