The macroeconomic effects of public expenditure in research and development

This paper investigates the impact of public R&D on economic growth and the R&D investment carried out by the private sector. By applying an econometric technique based on the Local-Projection to a dataset of 15 OECD countries considered for the 1981-2017 period, our findings show that public spending in R&D is associated with higher fiscal multipliers than those obtained for other classes of public expenditure. In addition, our results show that this specific class of public expenditure can generate spillover effects within the economic system by producing a crowding-in effect on private investment in R&D