ASSET BUBBLES AND ECONOMIC GROWTH UNDER ENDOGENOUS MARKET STRUCTURE

2017 ◽  
Vol 23 (06) ◽  
pp. 2338-2359 ◽  
Author(s):  
Kizuku Takao
Keyword(s):  
Economic Growth ◽  
Research And Development ◽  
Market Structure ◽  
Endogenous Growth ◽  
Firm Size ◽  
Asset Bubbles ◽  
Endogenous Growth Model ◽  
Endogenous Market Structure ◽  
Number Of Firms

By considering a simple endogenous growth model, we propose a new theoretical channel through which the presence of asset bubbles can promote economic growth. In the model economy, long-lived value-maximizing firms continuously improve the quality of their specific products through in-house research and development (R&D), while simultaneously new firms enter into the market. The key feature is endogenous market structure: The number of firms is endogenously determined, which leads to variation in firm size measured in terms of the scale of production at the level of an individual firm. The presence of asset bubbles unambiguously gives rise to larger firms. This allows in-house R&D expenditure to be spread over the greater numbers of goods that the firms produce, which can increase incentives to undertake in-house R&D.

scholarly journals MONETARY POLICY AND ENDOGENOUS MARKET STRUCTURE IN A SCHUMPETERIAN ECONOMY

2014 ◽  
Vol 20 (5) ◽  
pp. 1127-1145 ◽  
Author(s):  
Angus C. Chu ◽  
Lei Ji
Keyword(s):  
Economic Growth ◽  
Monetary Policy ◽  
Interest Rate ◽  
Market Structure ◽  
Firm Size ◽  
Growth Effect ◽  
Nominal Interest Rate ◽  
Long Run ◽  
Endogenous Market Structure ◽  
Number Of Firms

This study develops a monetary Schumpeterian model with endogenous market structure (EMS) to explore the effects of monetary policy on the number of firms, firm size, economic growth, and social welfare. EMS leads to different results from previous studies in which market structure is exogenous. In the short run, a higher nominal interest rate reduces the growth rates of innovation, output, and consumption and decreases firm size through reduction in labor supply. In the long run, a higher nominal interest rate reduces the equilibrium number of firms but has no steady-state effect on economic growth and firm size because of EMS. Although monetary policy has no long-run growth effect, increasing the nominal interest rate permanently reduces the levels of output, consumption, and employment. Taking transition dynamics into account, we find that welfare is decreasing in the nominal interest rate and the Friedman rule is optimal in this economy.

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.

scholarly journals R&D Direction and North-South Diffusion, Human Capital, Growth, and Wages

2011 ◽  
Vol 2011 ◽  
pp. 1-14 ◽  
Author(s):  
Óscar Afonso
Keyword(s):  
Economic Growth ◽  
Human Capital ◽  
Research And Development ◽  
Endogenous Growth ◽  
Wage Inequality ◽  
Capital Accumulation ◽  
Knowledge Diffusion ◽  
Human Capital Accumulation ◽  
Capital Growth ◽  
And Diffusion

This paper highlights some recent components related to the endogenous growth literature; in particular, (i) research and development progress, direction, and diffusion; (ii) human-capital accumulation; (iii) wage inequality; (iv) nonscale economic growth, showing how each one has been treated by the existing seminal literature and the expected impact of bringing them together. The connection of the different components is mainly done by involving the leading literature on North-South technological-knowledge diffusion by imitation under trade, and the prevailing literature on intra- and intercountry wage inequality.

scholarly journals SOCIAL CAPITAL AND INVESTMENT IN R&D: NEW EXTERNALITIES

2013 ◽  
Vol 14 (1) ◽  
pp. 77-97 ◽  
Author(s):  
Tiago Neves Sequeira ◽  
Alexandra Ferreira-Lopes
Keyword(s):  
Social Capital ◽  
Human Capital ◽  
Research And Development ◽  
Endogenous Growth ◽  
Growth Model ◽  
Physical Capital ◽  
Efficient Solutions ◽  
Social Planner ◽  
Research Networks ◽  
Endogenous Growth Model

We introduce social capital in an endogenous growth model with physical capital, human capital, and research and development (R&D), and we compare the market with the efficient solutions. As social capital is not tradable in the market and since it favours research networks, it introduces new externalities in this framework. These externalities induce the market to invest less in social capital than would a social planner and decrease the tendency to underinvestment in R&D. We quantify the distortions in the model. In some conditions, the new distortions are strong enough to overcome the usual result of underinvestment in R&D.

scholarly journals Quality of Economic Growth as a Prerequisite for Improving the Efficiency of Management of Socio-Economic Development in Russia

2020 ◽  
Vol 14 (3) ◽  
pp. 83-96
Author(s):  
L. A. Strizhkova ◽  
G. O. Kuranov
Keyword(s):  
Economic Growth ◽  
Economic Development ◽  
Practical Purpose ◽  
Inclusive Development ◽  
Controversial Issues ◽  
Russian Economy ◽  
Endogenous Growth Model ◽  
Development Outcomes ◽  
Methodological Aspects

The article is devoted to the development of indicators of the quality of economic growth. The authors associate the primary practical purpose of the system of indicators of the quality of economic growth with improving information and scientific and methodological support for the process of developing and implementing decisions of the state’s economic policy. We considered methodological aspects of compiling a system of indicators of the quality of economic growth, described problems in this area, and proposed approaches to their solution. Further, we gave estimates of factors that determine the dynamics of economic growth. We have provided a special place to the discussion of controversial issues in the field of assessing the quality of economic growth, including the problem of reconciling the idea of inclusive development and endogenous growth model of the Russian economy. It also includes approaches to the innovative factor in development outcomes that reflect the regional dimension in the system of quality indicators of economic development. The authors present and justify their views on several controversial issues, continuing the discussion of this topic that began in the framework of the Efimov Readings II (2019).

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