Author: Dirk BethmannPublisher:
ISBN:
Category :
Languages : en
Pages : 28
Book Description
A Simple Method to Study the Transitional Dynamics in Endogenous Growth Models
Author: Dirk BethmannTransitional Dynamics in Two-sector Models of Endogenous Growth
Author: Casey B. MulliganPublisher:
ISBN:
Category : Capital
Languages : en
Pages : 70
Book Description
The steady state and transitional dynamics of two-sector models of endogenous growth are analyzed in this paper. We describe necessary conditions for endogenous growth. The conditions allow us to reduce the dynamics of the solution to a system with one state-like and two control-like variables. We analyze the determinants of the long run growth rate. We use the Time-Elimination Method to analyze the transitional dynamics of the models. We find that there are transitions in real time if the point-in-time production possibility frontier is strictly concave, which occurs, for example, if the two production functions are different or if there are decreasing point-in-time returns in any of the sectors. We also show that if the models have a transition in real time, the models are globally saddle path stable. We find that the wealth or consumption smoothing effect tends to dominate the substitution or real wage effect so that the transition from relatively low levels of physical capital is carried over through high work effort rather than high savings. We develop some empirical implications. We show that the models predict conditional convergence in that, in a cross section, the growth rate is predicted to be negatively related to initial income but only after some measure of human capital is held constant. Thus, the models are consistent with existing empirical cross country evidence.
Transitional Dynamics and Endogenous Growth Revisited. The Case of Public Capital
Author: Blanca Sanchez-RoblesPublisher:
ISBN:
Category :
Languages : en
Pages : 0
Book Description
This paper explores some applications of the time elimination technique to models of endogenous growth that include two kinds of inputs (private and public capital). Two alternative specifications of the production function are considered: i.e. a CES and a Jones-Manuelli technology. Because of the homogeneity of degree one of both production functions on private and public capital considered together, these new models predict endogenous growth, but the main difference with the standard model (Barro, 1990) is that these new specifications allow for transitional dynamics towards the steady state. First, the steady state rate of growth of output is obtained for both models, by means of applying the traditional optimal control techniques. Next, the models are calibrated and simulated by applying the time elimination technique. This numerical method allows us to understand the transitional dynamics more deeply. It also provides some insights about the speed of convergence of the model towards the steady state under each of the production function settings and for various values of the parameters. Basic results show that the speed of convergence is slower if we use a CES specification, whereas the transition is faster and less smooth if a Jones-Manuelli production function is assumed. Finally, the technique enables us to compare the results using different values of some parameters of the models.
Dynamics, Stability, and Openness in an Endogenous Growth Model with Firm Heterogeneity
Author: Hideaki UchidaPublisher:
ISBN:
Category :
Languages : en
Pages : 0
Book Description
This study aims to examine the transitional dynamics and stability of an endogenous growth model with firm heterogeneity. In general, even if trade liberalization promotes economic growth in the long run, it does not mean that free trade will always enhance growth rate. The main purpose of this study is to analyze the effects of trade liberalization policy on the transitional dynamic path with the numerical solution method.Our main finding is that trade liberalization has different effects on the transitional path depending on the initial stock variables. In a knowledge-scarce economy, free trade raises the economic growth rate at any point in the growth path. In a knowledge-abundant economy, the economic growth rate falls temporarily for some intervals due to free trade, which replicates the temporal decline around the trade liberalization described in previous empirical research. This study also shows that international trade can promote economic growth even if international knowledge spillovers do not occur.
Learning by doing and transitional dynamics in a two-good model of endogenous growth
Author: Svetlana PoshtanovaOn Convergence in Endogenous Growth Models
Author: Salvador OrtigueiraPublisher:
ISBN:
Category : Convergence
Languages : en
Pages : 42
Book Description
Phases of Economic Development and the Transitional Dynamics of an Innovation-Education Growth Model
Author: Maurizio IacopettaPublisher:
ISBN:
Category :
Languages : en
Pages :
Book Description
This paper extends earlier analysis of the transitional dynamics of a growth model in which both human capital and innovation drive income expansion. Funke and Strulik [2000]. On endogenous growth with physical capital, human capital and product variety. European Economic Review 44 [491-515] suggest that the typical advanced economy follows three development phases, characterized in a temporal order by physical capital accumulation, human capital formation, and innovation, and that the transitional dynamics of the model reproduce such a sequencing. I argue that other sequences of the phases of development are possible and show that the model can generate a trajectory in which innovation precedes human capital formation. This trajectory accords with the observation that the rise in formal education followed with a considerable lag the process of industrialization. U.S. income and educational time series data are used to corroborate the innovation-education trajectory.
Transitional Dynamics and Indeterminacy of Equilibria in an Endogenous Growth Model with a Public Input
Author: Theodore PalivosPublisher:
ISBN:
Category : Economic policy
Languages : en
Pages : 21
Book Description
Equilibrium Dynamics in Two-sector Models of Endogenous Growth
Author: Antonio Ladrón de GuevaraPublisher:
ISBN:
Category : Economic development
Languages : en
Pages : 92
Book Description
Dynamics of Endogenous Economic Growth
Author: Gordon W. SchmidtPublisher: Elsevier
ISBN: 9780444512253
Category : Business & Economics
Languages : en
Pages : 512
Book Description
This book is concerned with the methods by which the dynamics of endogenous economic growth systems may be analysed and numerically computed, and with the validation of such numerical computations through qualitative economic reasoning. The methods comprise linearisation, phase-space analysis and a variety of numerical integration techniques. In particular, the book provides a detailed examination of the transitional dynamics (the movement from some current state towards a steady-state equilibrium) of the influential endogenous growth model from Paul Romer's 1990 Journal of Political Economy article: "Endogenous Technological Change".