We examine the growth promoting roles of R&D, international R&D spillovers, and trade in a world econometric model. A country can raise its total factor productivity by investing in R&D. Countries can also boost their productivity by trading with other countries that have large ‘stocks of knowledge’ from their cumulative R&D activities. We use a special version of MULTIMOD that incorporates R&D spillovers among industrial countries and from industrial countries to developing countries. Our simulations suggest that R&D, R&D spillovers, and trade play important roles in boosting growth in industrial and developing countries.
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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number
1467.
Find related papers by JEL classification: O31 - Economic Development, Technological Change, and Growth - - Technological Change - - - Innovation and Invention: Processes and Incentives O40 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
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