The macroeconomic experience of the last decade stressed the importance of jointly studying the growth and
business cycle fluctuations behavior of the economy. To analyze this issue, we embed a model of Schumpeterian
growth into an estimated medium-scale DSGE model. Results from a Bayesian estimation suggest that investment
risk premia are a key driver of the slump following the Great Recession. Endogenous innovation dynamics
amplifies financial crises and helps explain the slow recovery. Moreover, financial conditions also account for a
substantial share of R&D investment dynamics.
COZZI Guido;
PATARACCHIA Beatrice;
PFEIFFER Philipp;
RATTO Marco;
2017-05-29
Publications Office of the European Union
JRC104106
978-92-79-67436-5,
2467-2203,
OP KJ-AE-17-001-EN-N,
https://publications.jrc.ec.europa.eu/repository/handle/JRC104106,
10.2760/528796,
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