Innovation dynamics and fiscal policy: Implications for growth, asset prices, and welfare

Arbeitspapier

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.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: SAFE Working Paper ; No. 171

Classification and Topics

• Classification: Wirtschaft ; Investment; Capital; Intangible Capital; Capacity ; Asset Pricing; Trading Volume; Bond Interest Rates ; Taxation, Subsidies, and Revenue: General ; Welfare, Well-Being, and Poverty: General ; Innovation; Research and Development; Technological Change; Intellectual Property Rights: General
• Subject: endogenous growth ; asset pricing ; government ; fiscal policy ; heterogeneous innovation

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Donadelli, Michael ; Grüning, Patrick
• Event: Veröffentlichung
• (who): Goethe University Frankfurt, SAFE - Sustainable Architecture for Finance in Europe
• (where): Frankfurt a. M.
• (when): 2017

Further information

• DOI: doi:10.2139/ssrn.2955089
• Handle: http://hdl.handle.net/10419/157312
• URN: urn:nbn:de:hebis:30:3-431627
• Last update: 10.03.2025, 11:43 AM CET