TY  - UNPD
A1  - Grüning, Patrick
T1  - International endogenous growth, macro anomalies, and asset prices
T2  - SAFE working paper series ; No. 83
N2  - This paper studies a two-country production economy with complete and frictionless financial markets and international trade of final goods in which competition in R&D leads to endogenous new firm creation and economic growth. Current monopolists ("incumbents") and potential new firms ("entrants") compete in developing patents domestically. I find that this induces negative spillover in consumption, i.e. home country's consumption decreases in response to positive productivity shocks in the foreign country. Second, there is positive spillover in R&D expenditures, i.e. home country's R&D expenditures increase in response to positive foreign productivity shocks, which is consistent with empirical evidence on international technology diffusion. Furthermore, the stylized fact in international macroeconomics that the cross-country correlation of consumption growth is significantly lower than the one of output growth is explained by the model. Fourth, net exports are negatively correlated with output as in the data. Fifth, the model matches the high comovement of the risk-free rates and stock returns across countries. Finally, the model produces a positive value premium.
T3  - SAFE working paper - 83 
KW  - Innovation
KW  - Product Market Competition
KW  - Endogenous Growth
KW  - Long-run Risk
KW  - International Finance
Y1  - 2015
UR  - http://publikationen.ub.uni-frankfurt.de/frontdoor/index/index/docId/31823
UR  - https://nbn-resolving.org/urn:nbn:de:hebis:30:3-318234
UR  - http://ssrn.com/abstract=2554286
IS  - This version: January 22, 2015
PB  - SAFE
CY  - Frankfurt am Main
ER  -