Author: Svetlana PoshtanovaPublisher:
ISBN:
Category :
Languages : en
Pages : 25
Book Description
Learning by doing and transitional dynamics in a two-good model of endogenous growth
Author: Svetlana PoshtanovaTransitional 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.
Equilibrium Dynamics in Two-sector Models of Endogenous Growth
Author: Antonio Ladrón de GuevaraPublisher:
ISBN:
Category : Economic development
Languages : en
Pages : 92
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.
A Simple Method to Study the Transitional Dynamics in Endogenous Growth Models
Author: Dirk BethmannEconomic Growth, second edition
Author: Robert J. BarroPublisher: MIT Press
ISBN: 9780262025539
Category : Business & Economics
Languages : en
Pages : 676
Book Description
The long-awaited second edition of an important textbook on economic growth—a major revision incorporating the most recent work on the subject. This graduate level text on economic growth surveys neoclassical and more recent growth theories, stressing their empirical implications and the relation of theory to data and evidence. The authors have undertaken a major revision for the long-awaited second edition of this widely used text, the first modern textbook devoted to growth theory. The book has been expanded in many areas and incorporates the latest research. After an introductory discussion of economic growth, the book examines neoclassical growth theories, from Solow-Swan in the 1950s and Cass-Koopmans in the 1960s to more recent refinements; this is followed by a discussion of extensions to the model, with expanded treatment in this edition of heterogenity of households. The book then turns to endogenous growth theory, discussing, among other topics, models of endogenous technological progress (with an expanded discussion in this edition of the role of outside competition in the growth process), technological diffusion, and an endogenous determination of labor supply and population. The authors then explain the essentials of growth accounting and apply this framework to endogenous growth models. The final chapters cover empirical analysis of regions and empirical evidence on economic growth for a broad panel of countries from 1960 to 2000. The updated treatment of cross-country growth regressions for this edition uses the new Summers-Heston data set on world income distribution compiled through 2000.
On Convergence in Endogenous Growth Models
Author: Salvador OrtigueiraPublisher:
ISBN:
Category : Convergence
Languages : en
Pages : 42
Book Description
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
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.
Lecture Notes on Economic Growth (II)
Author: Xavier Sala-i-MartinPublisher:
ISBN:
Category : Economic development
Languages : en
Pages : 58
Book Description
This paper explores the five simplest models of endogenous growth. We start with the AK model (Rebelo (1990)) and argue that all endogenous growth models can be viewed as variations or microfoundations of it. We then examine the Barro (1990) model of government spending and growth. Next we look at the Arrow-Sheshinskj-Romer model of learning by doing and externalities. The Lucas (1988) model of human capital accumulation is then considered. Finally, we present a simple model of R & D and growth.