R and D spillovers and global growth

We examine the growth promoting roles of R and D, international R and D spillovers, and trade in a world econometric model. A country can raise its total factor productivity by investing in R and D. But countries can also boost their productivity by trading with other countries that have large 'stocks of knowledge' from their cumulative R and D activities. We use a special version of MULTIMOD that incorporates R and D spillovers among industrial countries and from industrial countries to developing countries. Our simulations suggest that R and D, R and D spillovers, and trade play important roles in boosting growth in industrial and developing countries.