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- Title
Losers and losses of COVID-19: a directed technical change analysis with fiscal and monetary policies.
- Authors
Afonso, Oscar
- Abstract
We develop a directed technical change growth model with both public and private sectors. Due to the COVID-19 pandemic, labor productivity and R &D activity in the private sector are considered to have a negative shock. The former shock causes an immediate fall in the private premium, which can be reversed during transition dynamics towards the steady-state. Fiscal policies are materialized in direct and indirect R &D subsidies, and the monetary policies consist of relaxing cash-in-advance restrictions. An appropriate fiscal policy, together or not with monetary policy, can restore the pre-shock situation. Monetary policy is reinforced in the presence of monetary-transaction costs on consumption and of money-in-the-utility function.
- Subjects
MONETARY policy; FISCAL policy; LABOR productivity; COVID-19; PRIVATE sector; COVID-19 pandemic; PUBLIC sector
- Publication
Economic Change & Restructuring, 2023, Vol 56, Issue 3, p1777
- ISSN
1573-9414
- Publication type
Article
- DOI
10.1007/s10644-023-09486-9