The MONROE work plan will be carried in the frame of seven work packages (WPs). Management (WP1) and dissemination (WP7) work packages provide the broad canvas for the whole duration of the project and ensure its good functioning. Two theoretical work packages (WP2 and WP3) investigate in depth the role of R&I and R&I policies as well as the possibilities for their consistent representation in current state-of-the-art macro and regional-economic models. Empirical (WP5) and modelling (WP4) work packages use the methodological framework developed in WP2 and WP3 in order to build specific modelling tools or modules that incorporate R&I and R&I policies as well as to estimate empirically all main parameters of these models on the basis of existing European country, regional and micro-level data. The resulting empirically validated and estimated modelling toolkit will be used for the analysis of specific R&I policies and programmers as well as for the construction of a meta-model that will serve as a basis for the interactive online tool.
WP1: Project management and advisory board
Project Coordination is a crucial overarching WP that will ensure that the MONROE project realises its high ambitions and provides deliverables on time and of the highest quality. This will have a dedicated sub-WP for Project Management and coordination of a high-level Project Advisory Board including key theoretical and modelling experts.
WP2: Examining mechanisms of policy in models with endogenous growth and productivity.
This WP aims at creating a theoretical and methodological framework for the representation of R&I policies in various types of macro-economic models. The work will include analyzing the importance of financial constraints on R&I and growth; analyzing the optimal policies of countries in which technology transfers are more important than domestic innovation; exploring the interaction between R&I and adoption in medium frequency growth, and studying the effects of potential economic policies.
WP3: Addressing the challenges of building, using and estimating models with endogenous productivity.
Working with models with endogenous productivity presents a number of challenges that are not faced by more standard models. For example, in models in which R&I leads to structural change, the resulting model will not possess a balanced growth path, and hence the model cannot be simulated or estimated by standard techniques. In this WP, the aim is to solve some of these technical difficulties, for the benefit of future researchers in the field. In this work package objectives on the appropriate modelling of endogenous growth are included such as
- i) Developing methodology for estimating DSGE models without balanced growth.
- ii) Developing methodology for simulating DSGE models featuring spatial heterogeneity and spatial diffusion of technology.
iii) Introducing capital product and process innovation into CGE models
- iv) Human Capital formation, Intangible Assets
WP4: Construction of models for policy with endogenous productivity.
The objective of this WP is to improve models that are used for applied policy analysis and are already quite advanced in representing endogenous technical change mechanisms. This WP will develop a set of macroeconomic modelling tools that will capture in adequate detail the peculiarities of the R&I policies and programs and that will enable the evaluation of their short, medium, and long term effects on key economic and welfare variables such as economic growth, employment, competitiveness, sustainability etc. at sectoral, country and regional levels.
The modelling work will focus on improving the representation of:
- i) the decision of the public sector on R&I
- ii) the public instruments and institutional settings that incentivize R&I
iii) the quality of R&I by sector and country
- iv) the role of human capital in the production of knowledge and its importance in hosting innovation produced elsewhere
- v) the mechanisms through which knowledge is diffused across countries and sectors
- vi) the role of financial constraints of countries and sectors in supporting R&I.
WP5: Parameterisation and estimation of models for policy with endogenous productivity.
The successful integration of research and innovation in macroeconomic models requires a proper calibration of the new model components. Given the relative scarcity of available empirical studies on elasticities and other parameters of innovation-related and human capital-related functions, each modelling team will dedicate effort to improve the model calibration. The tasks in this work package will contribute to make the novel methodologies more reliable for policy assessment, providing empirical counterparts of the mathematical functions used to represent the creation, innovation and diffusion phases of technological progress. The aim is also to supply new evidence for the parameterization of macro-models with endogenous research and innovation, based on the most recent available data.
WP6: Scenario definition, simulations of R&I policies and programs, results and policy recommendations
The primary aim of this WP is to explore and evaluate the societal benefits generated by public funding for research and innovation, so as to provide practical policy recommendations to policy makers. Three different modelling approaches will be used to assess a comprehensive range of scenarios that are designed to represent different future funding programmes. The outputs from the modelling, including estimated impacts on major societal challenges, will be consolidated to provide a clear set of policy recommendations to key decision makers.
WP7: Communication, dissemination and exploitation
The MONROE Project will have an over-arching work package dedicated to the communication and dissemination of the project activities and outputs (WP7.1) and to commercialise the technical and societal innovation and impact within the project (WP7.2). One major part of this WP will be the construction, dissemination and further exploitation of the interactive internet tool for the assessment of impacts of R&I and R&I policies and programmes (WP7.3). These cross-cutting WPs will have dedicated plans and be led by partners tasked with the integration of these themes across the MONROE project activities and deliverables.