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Directed innovation policies and the supermultiplier: An empirical assessment of mission-oriented policies in the US economy
Authors:Matteo Deleidi  Mariana Mazzucato
Institution:1. Institute for Innovation and Public Purpose (IIPP), University College London, 11 Montague Street, London, WC1B 5BP, UK;2. Parthenope University of Naples, Department of Business and Economics, Palazzo Pacanowski, Via Generale Parisi 13, 80132, Naples, Italy;3. Roma Tre University, Department of Economics, Via Silvio D''Amico 77, 00148, Rome, Italy;1. Kedge Business School, Rue Antoine Bourdelle, Domaine de Luminy BP 921, 13288 Marseille, France;2. SKEMA Business School, Université Côte d''Azur (GREDEG), France;1. National Technical University of Athens, Laboratory of Industrial and Energy Economics, 9 Heroon Polytechniou, 15780, Zografou Campus, Athens, Greece;2. University of Peloponnese, School of Economics & Technology, Department of Economics, Tripoli Campus, Tripoli 22100, Greece;3. Centre of Planning and Economic Research (KEPE), 11 Amerikis St., 10672 Athens, Greece;4. General Secretariat for Industry, Ministry of Economy and Development, 20, Kaniggos Sqr, 10200 Athens, Greece;5. National Technical University of Athens, Laboratory of Industrial and Energy Economics, 9 Heroon Polytechniou, 15780, Zografou Campus, Athens, Greece
Abstract:This paper investigates the determinants of economic growth from both a theoretical and an empirical perspective. The paper combines the supermultiplier model of growth with the Neo-Schumpeterian framework that emphasises the entrepreneurial role of the state. We aim to detect the macroeconomic effect generated by alternative fiscal policies: generic ones and more directed ‘mission-oriented’ ones. Using an SVAR model for the US economy for the 1947–2018 period, we show that mission-oriented policies produce a larger positive effect on GDP (fiscal multiplier) and on private investment in R&D (crowd-in effect) than the one generated by more generic public expenditures.
Keywords:
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