Do Monetary Policy and Economic Conditions Impact Innovation? Evidence from Australian Administrative Data
Omer Majeed,
Jonathan Hambur,
Robert Breunig
Abstract:Recent papers have argued that monetary policy and economic conditions can influence the amount of innovative activity in the economy, and therefore productivity and living standards in the future. This paper examines whether this is the case for Australia, a small open economy that tends to import innovation from overseas. We find that contractionary (expansionary) monetary policy reduces (increases) aggregate research and development (R&D) spending, and that lower (higher) R&D spending reduces (incre… Show more
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