Macroeconomic Policies for Productivity Growth

This project develops a Keynesian growth framework to analyze how monetary and fiscal policies can harness AI and renewable energy advancements for productivity growth and equitable welfare gains.

Subsidie
€ 1.457.750
2025

Projectdetails

Introduction

Rapid advances in artificial intelligence and renewable energy technologies may boost productivity growth over the coming years, but also cause a disruptive reallocation of economic activity among workers, firms, sectors, and countries. How should monetary and fiscal policies be designed to ensure that these new technologies deliver productivity improvements and widespread welfare gains? In this proposal, I will address this fundamental question by developing a Keynesian growth framework – i.e. a unified theory of business cycles and growth – in which macroeconomic policies traditionally associated with aggregate demand management, such as monetary and cyclical fiscal policies, affect firms’ investment in new technologies and productivity.

Part I: Development of a Novel Keynesian Growth Model

In part I, I will develop a novel Keynesian growth model with multiple alternative technologies (e.g. human labor vs. artificial intelligence, dirty vs. clean energy), and realistic heterogeneity among households, firms, and sectors.

Key Focus Areas

The framework will shed light on:

  • The trade-offs faced by central banks during the energy transition.
  • The macroeconomic policies needed to prevent the spread of artificial intelligence from causing technological unemployment.
  • The macroeconomic management of the sectoral reallocation process driven by accelerations in technological change.

Part II: Open Economy Keynesian Growth Model

In part II, I will provide an open economy Keynesian growth model to study the interactions between capital flows, productivity growth, and macroeconomic policies.

Research Objectives

I will use the framework to:

  1. Explain why the inception of the euro has fostered capital mobility, but not yet productivity convergence among member countries.
  2. Explore the impact of US monetary and fiscal policies on international value chains and global productivity.
  3. Investigate the dual role played by the United States as center of the international monetary and technological systems.

Financiële details & Tijdlijn

Financiële details

Subsidiebedrag€ 1.457.750
Totale projectbegroting€ 1.457.750

Tijdlijn

Startdatum1-2-2025
Einddatum31-1-2030
Subsidiejaar2025

Partners & Locaties

Projectpartners

  • Centre de Recerca en Economia Internacional (CREI)penvoerder

Land(en)

Spain

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