Sectoral fiscal multipliers and technology in open economy

• 成果类型: Article
• 署名作者: Cardi, Olivier; Restout, Romain
• 署名单位: Centre National de la Recherche Scientifique (CNRS); CNRS - Institute for Humanities & Social Sciences (INSHS); Universite de Lorraine; Centre National de la Recherche Scientifique (CNRS); Universite de Lorraine; INRAE
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/j.jinteco.2023.103789
• 发表日期: 2023
• 关键词: Sector-biased government spending shocks; Endogenous technological change; Factor-augmenting efficiency; open economy; Labor reallocation; CES production function; Labor income share

摘要

Our evidence reveals that the rise in real GDP is uniformly distributed across sectors following a government spending shock while labor growth is concentrated in non-traded industries. A rationale behind these two findings lies in technology which responds endogenously to the government spending shock. While technology improvements are concentrated in traded industries, technological change is biased toward labor (capital) in non-traded (traded) indus-tries. To account for our evidence, we consider a semi-small open economy model with trad-ables and non-tradables where both capital and technology can be used more intensively. While financial openness amplifies the biasedness of the demand shock toward non-traded goods, labor mobility costs, imperfect substitutability between home-and foreign-produced traded goods and endogenous capital utilization are necessary conditions for giving rise to traded technology improvement. The model can reproduce the size of fiscal multipliers once we let technology adjustment costs together with factor-biased technological change vary across sectors.& COPY; 2023 The Author(s). Published by Elsevier B.V. This is an open access article under the CC BY license (http://creativecommons.org/licenses/by/4.0/).