Inflation and Innovation in a Schumpeterian Economy with North-South Technology Transfer

Chu, Angus ORCID: 0000-0002-7196-1277, Cozzi, Guido, Furukawa, Yuichi and Liao, Chih-Hsing (2019) Inflation and Innovation in a Schumpeterian Economy with North-South Technology Transfer. Journal of Money, Credit and Banking, 51 (2-3). pp. 683-719.

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Abstract

This study analyzes how inflation affects innovation and international technology transfer via cash‐in‐advance constraints on R&D. We consider a North–South quality‐ladder model that features innovative Northern R&D and adaptive Southern R&D. We find that higher Southern inflation causes a permanent decrease in technology transfer, a permanent increase in the North–South wage gap, and a temporary decrease in the Northern innovation rate. Higher Northern inflation causes a temporary decrease in the Northern innovation rate, a permanent decrease in the North–South wage gap, and ambiguous effects on technology transfer. Finally, we calibrate the model to China–U.S. data to perform a quantitative analysis.

Item Type:	Article
Depositing User:	Symplectic Admin
Date Deposited:	28 Mar 2019 09:16
Last Modified:	19 Jan 2023 00:55
DOI:	10.1111/jmcb.12514
Related URLs:	Publisher
URI:	https://livrepository.liverpool.ac.uk/id/eprint/3035150