Technology Trade with Asymmetric Tax Regimes and Heterogeneous Labor Markets: Implications for Macro Quantities and Asset Prices

Giuliano Curatola, Michael Donadelli and Patrick Grüning ()
Additional contact information
Patrick Grüning: Bank of Lithuania & Faculty of Economics, Vilnius University

No 47, Bank of Lithuania Working Paper Series from Bank of Lithuania

Abstract: The international diffusion of technology plays a key role in stimulating global growth and explaining co-movements of international equity returns. Existing empirical evidence suggests that countries are heterogeneous in their attitude toward innovation: Some countries rely more on technology adoption while other countries rely more on internal technology production. European countries that rely more on adoption are also typically characterized by lower fiscal policy flexibility and higher labor market rigidity. We develop a two-country model, in which both countries rely on R&D and adoption, to study the shortand long-run effects of aggregate technology and adoption probability shocks on economic growth in the presence of the aforementioned asymmetries. Our framework suggests that an increase in the ability to adopt technology from abroad stimulates future economic growth in the country that benefits from higher adoption rates but the beneficial effects also spread to the foreign country. Moreover, it helps to explain the differences in macro quantities and equity returns observed in the international data.

Keywords: Technology Adoption; R&D Investment; Asymmetric Tax Regimes; Asset Prices (search for similar items in EconPapers)
JEL-codes: E3 F3 F4 G12 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2017-10-05
New Economics Papers: this item is included in nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.lb.lt/en/publications/no-47-technology ... ies-and-asset-prices Full text (application/pdf)
Our link check indicates that this URL is bad, the error code is: 403 Forbidden

Related works:
Journal Article: Technology trade with asymmetric tax regimes and heterogeneous labour markets: Implications for macro quantities and asset prices (2022)
Working Paper: Technology trade with asymmetric tax regimes and heterogeneous labor markets: Implications for macro quantities and asset prices (2017)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:lie:wpaper:47

Access Statistics for this paper

More papers in Bank of Lithuania Working Paper Series from Bank of Lithuania Bank of Lithuania Gedimino pr. 6, LT-01103 Vilnius, Lithuania. Contact information at EDIRC.
Bibliographic data for series maintained by Aurelija Proskute ().