Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/249188 
Year of Publication: 
2021
Series/Report no.: 
JRC Working Papers on Territorial Modelling and Analysis No. 04/2021
Publisher: 
European Commission, Joint Research Centre (JRC), Seville
Abstract: 
Growth and business cycles have a long tradition of being studied separately. However, events such as the Great Recession raise concerns that severe downturns may have detrimental implications for growth. If so, what policies may help alleviate such long-lasting effects of large recessions? To study these questions, we develop a tractable general equilibrium model of endogenous growth featuring heterogeneous firms, financial constraints and a range of innovation policies. A preliminary analysis suggests that counter-cyclical tax credits may serve as a powerful automatic stabilizer alleviating the long-lasting negative effects of severe cyclical downturns.
Subjects: 
Firm dynamics
innovation policy
endogenous growth
business cycles
JEL: 
F12
F13
O31
O41
Creative Commons License: 
cc-by Logo
Document Type: 
Working Paper

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