Briefing

Sectoral Multipliers and Technology Adoption as Insight Into Growth

Abstract: In a multisector model with technology adoption and rich network structures, what policy instruments best reduce distortions and promote economic development? This article discusses a framework showing that technology adoption has important effects on both the magnitude and relative effectiveness of sectoral industrial policies. After applying the framework to data on the Indian economy, adoption subsidies prove the most cost-effective instrument with high sectoral multipliers and relatively lower fiscal costs of implementation. Particularly promising sectors emerge that stand to foster the most growth from such subsidies.

Keywords: technology; sectoral policy; economic development;

Bibliographic Information

Provider: Federal Reserve Bank of Richmond

Part of Series: Richmond Fed Economic Brief

Publication Date: 2024-08

Volume: 24

Issue: 27