GROWTH AND FIRM DYNAMICS WITH HORIZONTAL AND VERTICAL R&D

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.

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

International Journal of Applied Evolutionary Computation ◽

10.4018/ijaec.2014100104 ◽

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.

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POLICY INTERACTION AND LEARNING EQUILIBRIA

Macroeconomic Dynamics ◽

10.1017/s1365100511000526 ◽

2011 ◽

Vol 17 (4) ◽

pp. 920-935 ◽

Cited By ~ 1

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.

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ON THE DYNAMIC EFFICIENCY OF BALANCED GROWTH PATHS IN AN ENDOGENOUS GROWTH SETTING

Macroeconomic Dynamics ◽

10.1017/s1365100515001078 ◽

2016 ◽

Vol 21 (8) ◽

pp. 1837-1856 ◽

Cited By ~ 1

Author(s):

Elena Del Rey ◽

Miguel-Angel Lopez-Garcia

Keyword(s):

Growth Rate ◽

Endogenous Growth ◽

Overlapping Generations ◽

Physical Capital ◽

Marginal Product ◽

Dynamic Efficiency ◽

Growth Path ◽

Balanced Growth ◽

Balanced Growth Path ◽

Laissez Faire

In overlapping-generations economies with life-cycle saving and exogenous growth, the laissez-faire equilibrium balanced growth path fails in general to achieve optimality, but is dynamically efficient if the marginal product of physical capital is greater than the growth rate of the economy. In this paper, we accommodate the concept of dynamic (in)efficiency in an overlapping-generations economy with endogenous growth due to human capital accumulation. We show that the condition that the marginal product of physical capital is larger than the growth rate of the economy is necessary but no longer sufficient for the dynamic efficiency of the laissez-faire equilibrium balanced growth path.

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

Acta Oeconomica ◽

10.1556/032.2021.00003 ◽

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.

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Stochastic Growth and Factor Income Risk

German Economic Review ◽

10.1111/j.1468-0475.2009.00489.x ◽

2009 ◽

Vol 10 (4) ◽

pp. 422-447 ◽

Cited By ~ 3

Author(s):

Christiane Clemens

Keyword(s):

Labor Supply ◽

Labor Income ◽

Growth Path ◽

Income Risk ◽

Balanced Growth ◽

Labor Income Risk ◽

Factor Income ◽

Endogenous Growth Model ◽

Balanced Growth Path ◽

Competitive Economy

Abstract This paper examines the effects of aggregate factor income risk in a tractable version of the stochastic Romer endogenous growth model. Labor supply is endogenous. The presence of labor income risk unambiguously increases savings and growth due to precautionary motives. Households not only underaccumulate but also work less along the balanced growth path of the competitive economy when compared with the Pareto-efficient allocation. The paper also discusses distributive disturbances for the case of inelastic labor supply. Here, growth effects are negative for empirically plausible correlations of the underlying shocks.

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The model of endogenous economic growth with a balance

Modeling of systems and processes ◽

10.12737/13439 ◽

2015 ◽

Vol 8 (2) ◽

pp. 29-34

Author(s):

Полев ◽

V. Polev ◽

Стародубцев ◽

Viktor Starodubtsev ◽

Свистов ◽

...

Keyword(s):

Economic Growth ◽

Endogenous Growth ◽

The State ◽

Discount Factor ◽

Growth Path ◽

Stationary Equilibrium ◽

Balanced Growth ◽

Endogenous Economic Growth ◽

Balanced Growth Path

In this paper, we propose a model of endogenous growth, based on the assumption that the discount factor is formed endogenously. Analysis of the model is limited to the study of the state of stationary equilibrium, which correspond to the balanced growth path, and it is shown that the set of stationary equilibria is a continuum, and each individual is uncertain balance

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Economic Growth, Public Debt and Welfare: Comparing Three Budgetary Rules

German Economic Review ◽

10.1111/j.1468-0475.2010.00516.x ◽

2011 ◽

Vol 12 (2) ◽

pp. 205-222 ◽

Cited By ~ 42

Author(s):

Alfred Greiner

Keyword(s):

Public Debt ◽

Public Spending ◽

Budget Constraint ◽

Growth Path ◽

Balanced Growth ◽

Long Run ◽

Endogenous Growth Model ◽

Balanced Growth Path ◽

Balanced Budget ◽

Elastic Labor Supply

Abstract We present an endogenous growth model with externalities of capital and elastic labor supply where we allow for public debt and welfare-enhancing public spending. We analyze different debt policies as regards convergence to a balanced growth path and their effects on long-run growth and welfare. Three budgetary rules are considered: the balanced budget rule, a budgetary rule where debt grows in the long run but at a rate lower than the balanced growth rate and a rule where public debt grows at the same rate as all other economic variables but where it guarantees that the intertemporal budget constraint is fulfilled.

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Distribution and Endogenous Growth: The Two-Class Pasinetti Model / Verteilung und endogenes Wachstum: Das Zwei-Klassen Modell von Pasinetti

Jahrbücher für Nationalökonomie und Statistik ◽

10.1515/jbnst-2001-0305 ◽

2001 ◽

Vol 221 (3) ◽

Author(s):

Alfred Greiner

Keyword(s):

Growth Rate ◽

Income Distribution ◽

Saddle Point ◽

Endogenous Growth ◽

Growth Path ◽

Balanced Growth ◽

Positive Externalities ◽

Balanced Growth Path ◽

Per Capita

SummaryThe paper extends the two-class Pasinetti model with workers and capitalists to allow for endogenous growth. Sustained per-capita growth results from positive externalities of investment which for its part only occur if workers devote time to education so that an efficient use of new machines is guaranteed. It is shown that there exists a unique balanced growth path which is a saddle point. The effects of raising education on the growth rate as well as on the income distribution between workers and capitalists are studied as well. It is demonstrated that education affects the balanced growth rate and, thus, the income of workers. However, it does not affect the ratio of workers’ income relative to the income of capitalists.

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A NOTE ON INFLATION, ECONOMIC GROWTH, AND INCOME INEQUALITY

Macroeconomic Dynamics ◽

10.1017/s1365100508070491 ◽

2009 ◽

Vol 13 (1) ◽

pp. 138-147 ◽

Cited By ~ 9

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.

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