Modification of NEMESIS technological innovation module

By , Private company and team of Ecole Centrale Paris.

We present in this paper the main modifications that are currently implemented in NEMESIS in order to improve the representation of endogenous technical change in the model.
The first part is about the ’state-of-the-art’. It presents first the general methodology used by the large scale multi-sectoral, multi-country models such as NEMESIS, for endogenizing technical change, and how the choices made by the different models can be related to the modern theories of endogenous growth. Then the case of NEMESIS is presented in details.
The second part describes the curretn developments with NEMESIS that concern principally the role played by ICT and intangible capital in the innovation process, and the modification of the production functions of the model.
This paper will be competed later, with the results of the econometric estimations and the analytical simulations, that will be achieved based of these new developments (Deliverable 9.5).