scholarly journals POLICY INTERACTION AND LEARNING EQUILIBRIA

2011 ◽  
Vol 17 (4) ◽  
pp. 920-935 ◽  
Author(s):  
Noritaka Kudoh
Keyword(s):  
Economic Growth ◽  
Growth Rate ◽  
Budget Deficit ◽  
Stable Equilibrium ◽  
Government Revenue ◽  
Balanced Growth ◽  
Policy Interactions ◽  
Endogenous Growth Model ◽  
Multiple Assets ◽  
Growth Equilibrium

This note studies fiscal–monetary policy interactions in an endogenous growth model with multiple assets. The “growth-rate Laffer curve” clarifies an important tension between economic growth and government revenue and reveals that higher economic growth does not always finance a larger budget deficit. There are two Pareto-ranked balanced-growth equilibria, which can both be E-stable. Although fiscal policy can eliminate the expectational indeterminacy, it rules out the equilibrium with a higher growth rate and higher welfare. Near the lower bound of the nominal interest rate, an arbitrarily small budget deficit will select the low-growth equilibrium to be the unique E-stable equilibrium.

GROWTH AND FIRM DYNAMICS WITH HORIZONTAL AND VERTICAL R&D

2013 ◽  
Vol 17 (7) ◽  
pp. 1438-1466 ◽  
Author(s):  
Pedro Mazeda Gil ◽  
Paulo Brito ◽  
Oscar Afonso
Keyword(s):  
Economic Growth ◽  
Growth Rate ◽  
Firm Dynamics ◽  
Growth Path ◽  
Economic Growth Rate ◽  
Balanced Growth ◽  
Composition Effects ◽  
Endogenous Growth Model ◽  
Balanced Growth Path ◽  
Empirical Growth

A negative or nonsignificant empirical correlation between aggregate R&D intensity and the economic growth rate is a well-known fact in the empirical growth literature, but scarcely addressed in the theoretical growth literature. This paper develops an endogenous-growth~model that explores the interrelation~between horizontal and vertical R&D under a lab-equipment specification that is consistent with that stylized fact. A key feature is that the growth rate is fully endogenous both on the intensive and on the extensive margin. Strong composition effects between horizontal and vertical R&D, along both transition and the balanced-growth path, then emerge as the main mechanism producing those results. This setting also allows us to obtain a relationship between economic growth and firm dynamics that is consistent with the empirical facts.

A NOTE ON INFLATION, ECONOMIC GROWTH, AND INCOME INEQUALITY

2009 ◽  
Vol 13 (1) ◽  
pp. 138-147 ◽  
Author(s):  
Yi Jin
Keyword(s):  
Economic Growth ◽  
Growth Rate ◽  
Income Inequality ◽  
Endogenous Growth ◽  
Money Growth ◽  
Relative Importance ◽  
Long Run ◽  
Endogenous Growth Model ◽  
The Relationship ◽  
Negative Growth

This paper develops a monetary endogenous growth model with capital and skill heterogeneity to analyze the relationship among inflation, growth, and income inequality. In the model inflation, growth, and inequality are jointly determined. We show that an increase in the long-run money growth rate raises inflation and reduces growth, but its effect on income inequality depends on the relative importance of the two types of heterogeneity. Inequality shrinks with the rise of inflation when capital heterogeneity dominates and enlarges when skill heterogeneity dominates. Therefore, our model supports a negative (positive) inflation–inequality relationship and a positive (negative) growth–inequality relationship when capital (skill) heterogeneity dominates. In any event, inflation and growth are negatively related.

The Impact of Defense Investment on Economic Growth in the Perspective of Time Series

2014 ◽  
Vol 5 (4) ◽  
pp. 44-58
Author(s):  
Bin Pan ◽  
Shih-Yung Wei ◽  
Xuanhua Xu ◽  
Wei-Chiang Hong
Keyword(s):  
Economic Growth ◽  
Growth Rate ◽  
Private Investment ◽  
Investment Risk ◽  
Demand And Supply ◽  
Economic Growth Rate ◽  
Proposed Model ◽  
Endogenous Growth Model ◽  
The Impact ◽  
The Relationship

By considering the demand and supply effects of defense investment and the uncertainty of the stochastic process of the production and defense investment, this study proposes a stochastic endogenous growth model to explore the impact of defense investment on economic growth. The results suggest that the relationship between defense investment and economic growth rate is nonlinear and obtains the optimal percentage of defense investment to maximize economic growth. Moreover, the impact of defense investment volatility on economic growth rate is subject to production and defense investment interference term's covariance and representative private investment risk preference. Finally, the empirical data are used to illustrate the applicability of the proposed model.

scholarly journals EFFECT OF A BUDGET DEFICIT ON INFLATION RATE IN VIETNAM

2017 ◽  
Vol 126 (5B) ◽  
pp. 117
Author(s):  
Nguyễn Thị Thùy Minh ◽  
Nguyễn Thị Thùy Dương
Keyword(s):  
Economic Growth ◽  
Growth Rate ◽  
Budget Deficit ◽  
Inflation Rate ◽  
Public Expenditure ◽  
The State ◽  
State Budget ◽  
Economic Growth Rate ◽  
Dialectical Relationship ◽  
The Relationship

<p>In recent years, Vietnam has achieved high economic growth rate so inflation has become a noticeable problem. The relationship between state budget deficit and inflation is a two-way dialectical relationship. However, within the limit of this article, the author only studies one-way relationship, the effect of budget deficit on inflation rate in Vietnam. Prolonged budget deficit and the remediation of the state budget deficit by different methods have affected the inflation rate on different degrees. This effect is analyzed by many approaches, both quantitative and qualitative, and includes five approaches: impact of fiscal policy inflation, impact of the state budget deficit level on inflation, impact of budget deficit funding on inflation, independence of monetary policy and its effect on inflation, effect of public expenditure on inflation.</p>

The impact of budget deficit, public debt and education expenditures on economic growth in Poland

2021 ◽  
Vol 71 (1) ◽  
pp. 59-84
Author(s):  
Michał Konopczyński
Keyword(s):  
Economic Growth ◽  
Fiscal Policy ◽  
Public Debt ◽  
Budget Deficit ◽  
Growth Path ◽  
Rapid Improvement ◽  
Balanced Growth ◽  
Education Expenditures ◽  
Balanced Growth Path ◽  
The Impact

AbstractThis paper investigates the relationship between economic growth in Poland and a few metrics of fiscal policy: budget deficit relative to GDP, the structure of public debt, education expenditures, and public consumption. We prove that with constant values of parameters of fiscal policy, over time the economy converges to the balanced growth path which is unique and globally asymptotically stable.Having calibrated the model with statistical data, we demonstrate that in the period of 2000–2016 economic growth in Poland was driven primarily by rapid improvement in the level of human capital (at a rate of 5.4% per annum), and secondarily due to the accumulation of capital (2.7% annually). If recent trends in fiscal policy are continued, the Polish economy will converge to the balanced growth path with GDP growing at 3.7%. This rate may be boosted, if fiscal policy is appropriately adjusted, for example by permanent reduction in budget deficit. We also analyse the effects of changes in the financing structure of public debt. Finally, we present several scenarios of increasing public and private spending on education.

GROWTH, PENSIONS, AND THE AGING JONESES

2011 ◽  
Vol 16 (1) ◽  
pp. 35-60 ◽  
Author(s):  
Walter H. Fisher ◽  
Ben J. Heijdra
Keyword(s):  
Economic Growth ◽  
Growth Rate ◽  
Pension System ◽  
Pension Reform ◽  
Mortality Rates ◽  
Defined Benefit ◽  
Defined Contribution ◽  
Pension Policy ◽  
Balanced Growth

We incorporate keeping-up-with-the-Joneses (KUJ) preferences into the Blanchard–Yaari framework and develop a model of balanced growth. In this context we investigate status preference, demographic shocks, and pension policy. We find that a higher degree of KUJ lowers economic growth, whereas, in contrast, a decrease in the fertility and mortality rates increase it. In the second part of the paper we extend the model by incorporating a pay-as-you-go (PAYG) pension system with a statutory retirement date. The latter implies that the growth rate is higher under PAYG. We also consider the implications of pension reform under both defined benefit and defined contribution schemes.

scholarly journals The Japanese economic enigma

2005 ◽  
Vol 57 (4) ◽  
pp. 449-483 ◽  
Author(s):  
Simon György ◽  
Simon György
Keyword(s):  
Economic Growth ◽  
Growth Rate ◽  
Economic Development ◽  
Rapid Growth ◽  
International Agreement ◽  
Economic Miracle ◽  
Rapid Economic Growth ◽  
Endogenous Growth Model ◽  
The Subject ◽  
Main Factor

The subject of this article is the Japanese enigma: the long-lasting extraordinarily rapid economic growth, the so-called Japanese economic miracle, and then a very sharp set-back in the growth rate, the prolonged recession. The authors, using an endogenous growth model, have proven that an economic miracle did not happen in Japan either: the very rapid growth proceeded in conformity with the general regularities of economic development. The main cause of prolonged recession, according to the empirical results, is the currency shock, occurred on the basis of an international agreement in the mid-1980s, which decelerated the hitherto extremely dynamic development of Japanese exports, considerably retarding the main factor of rapid economic growth.

Comments on debt dynamics

2003 ◽  
Vol 53 (1) ◽  
pp. 29-43
Author(s):  
T. Mellár
Keyword(s):  
Growth Rate ◽  
Economic Policy ◽  
Interest Rate ◽  
Public Debt ◽  
Budget Deficit ◽  
Stable Equilibrium ◽  
Nonlinear Models ◽  
The Third ◽  
Debt Dynamics ◽  
The Interest Rate

The present paper deals with the accumulation of public debt based on different kinds of nonlinear models. The same problem is analysed here in three different models. In the first model difference between growth rate and interest rate depends lineary on the debt/GDP ratio and the budget deficit. In the second model version this connection was non-linear, so two kinds of economic policy could be applied. In the third version the growth rate as well as the interest rate are in close connection with the debt/GDP ratio, in this case a stable equilibrium or a saddle path could be shown up.

Environmental Taxes and Economic Growth with Multiple Growth Engines

2021 ◽  
Vol 0 (0) ◽  
Author(s):  
Hamid Beladi ◽  
Ping-ho Chen ◽  
Hsun Chu ◽  
Mei-ying Hu ◽  
Ching-chong Lai
Keyword(s):  
Economic Growth ◽  
Growth Rate ◽  
Capital Accumulation ◽  
Output Growth ◽  
Environmental Taxes ◽  
Environmental Tax ◽  
Environmental Disaster ◽  
Long Run ◽  
Endogenous Growth Model ◽  
Relative Productivity

Abstract We develop an endogenous growth model in which long-run growth is driven by three engines: private abatement R&D, expanding-variety R&D, and capital accumulation. We show that an environmental tax activates private abatement by directing researchers from the variety R&D sector to the abatement R&D sector, which helps the economy avoid the environmental disaster. Our results also show that the effect of the environmental tax on long-run growth is uncertain, depending mainly on the relative productivity between the two R&D sectors. If the abatement R&D sector is sufficiently productive, increasing the environmental tax will enhance the balanced output growth rate and social welfare.

scholarly journals Economic Growth and Its Determinants in Pakistan

2008 ◽  
Vol 47 (4II) ◽  
pp. 471-486 ◽  
Author(s):  
Muhammad Shahbaz ◽  
Khalil Ahmad ◽  
A. R. Chaudhary
Keyword(s):  
Economic Growth ◽  
Growth Rate ◽  
Human Capital ◽  
Endogenous Growth ◽  
Growth Model ◽  
Political Institutions ◽  
Political Stability ◽  
Developed Countries ◽  
Poverty Level ◽  
Endogenous Growth Model

Economically developed countries have been able to reduce their poverty level, strengthen their social and political institutions, improve their quality of life, preserve natural environments and achieve political stability [Barro (1996); Easterly (1999); Dollar and Kraay (2002a); Fajnzylber, Lederman, et al. (2002)]. After the World War II, most of the countries adopted aggressive economic policies to improve the growth rate of real gross domestic product (GDP). The neoclassical growth models imply that during the evolution between steady states; technology, exogenous rate of savings, population growth and technical progress generate higher growth levels [Solow (1956)]. Endogenous growth model developed by Romer (1986) and Lucas (1988) argue that permanent increase in growth rate depends on the assumption of constant and increasing returns to capital.1 Similarly, Barro and Lee (1994) investigate the empirical association between human capital and economic growth. They seem to support endogenous growth model by Romer (1990) that highlight the role of human capital in economic activity. Fischer (1993) argues that long-term growth is negatively linked with inflation and positively correlated with better fiscal performance and factual foreign exchange markets. In the context of developing countries, investment both in capital and human capital, labour force, ability to adapt technological changes, open trade polices and low inflation are necessary for economic growth.

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