The transitional dynamics of an endogenous growth model: Generalizing production functions
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The transitional dynamics of an endogenous growth model: Generalizing production functionsDate
2012Center/Dept./Entity
Departamento de Economía Aplicada IICitation
Gómez, Manuel A. and Sequeira, Tiago N. (2012), The transitional dynamics of an endogenous growth model: Generalizing production functions, Studies in Nonlinear Dynamics and Econometrics 16 (5), Article 5.
Abstract
This paper devises a class of endogenous growth models with physical capital, human capital and product varieties. Unlike previous literature, we introduce a general specification of production that allows for disentangling the gains from specialization from the monopolistic markup. The consequences of separating both parameters on the equilibrium dynamics of the model are
analyzed. We find that the long-run growth rate ceases to depend on the markup when it is disentangled from the returns to specialization, and the same happens with the conditions for saddle-path stability. Numerical simulations show that the steady-state equilibria are more prone to be stable in the model that disentangles parameters. Furthermore, the model is able to generate a rich variety of development scenarios, accounting for a number of stylized facts related to the development process of industrialized countries.
Keywords
Endogenous growth
R&D
Human capital
Stability
Markup
R&D
Human capital
Stability
Markup
Description
The final publication is available at www.degruyter.com
Editor version
ISSN
1558-3708