scholarly journals Empirics of Solow growth model in Nepali economy

2020 ◽  
Vol 23 (1) ◽  
pp. 125-136
Author(s):  
Ramesh Kumar Paudel
Keyword(s):  
Economic Growth ◽  
Growth Rate ◽  
Human Capital ◽  
Steady State ◽  
Growth Model ◽  
Least Square ◽  
Extended Model ◽  
Saving Rate ◽  
State Equilibrium ◽  
Solow Growth Model

Economic growth model developed by R. M. Solow explained the steady-state equilibrium in long run based on neoclassical production function with factor substitutions and diminishing returns in context of developed economy. As the nature of Nepali economy is different than developed economy, this paper aims to analyze economic growth of Nepal in the Solow growth model standard. Specifically, it aims to examine the effect of saving rate, labor growth and human capital on economic growth. On basis of steady-state equilibrium equation developed by Solow, regression equation is developed to find the effect of exogenous variables saving rate and labor growth rate on per capita GDP. Further, the model is extended by adding human capital as regressor. Data of 44 years of Nepali economy are used to analyze the model. Since time series of all the variables are stationary at first difference and they contain same stochastic trend, coefficients are estimated by using ordinary least square method. The analysis shows that the Solow model is applicable to Nepali economy as the predicted coefficients are very close to estimated coefficients. However, the estimated coefficients are very less than the predicted coefficients of the extended model. Furthermore, coefficient of labor growth rate is statistically insignificant in the extended model.

scholarly journals A growth model with qualities, varieties, and human capital: stability and transitional dynamics

2014 ◽  
Vol 18 (5) ◽  
Author(s):  
Tiago Neves Sequeira ◽  
Alexandra Ferreira-Lopes ◽  
Orlando Gomes
Keyword(s):  
Economic Growth ◽  
Human Capital ◽  
Steady State ◽  
Population Growth ◽  
Growth Model ◽  
Transitional Dynamics ◽  
Quality Ladders ◽  
Endogenous Growth Model ◽  
The Stability

AbstractThis article analyses the stability properties of the steady-state and the transitional dynamics of an endogenous growth model with human capital, increasing-varieties R&D, and quality-ladders R&D [Strulik, H. 2005. “The Role of Human Capital and Population Growth in R&D-Based Models of Economic Growth.”

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.

scholarly journals A Discrete Heterogeneous-Group Economic Growth Model with Endogenous Leisure Time

2009 ◽  
Vol 2009 ◽  
pp. 1-17
Author(s):  
Wei-Bin Zhang
Keyword(s):  
Economic Growth ◽  
Human Capital ◽  
Income Distribution ◽  
Growth Model ◽  
Time Allocation ◽  
Capital Accumulation ◽  
Economic Growth Model ◽  
National Economic ◽  
The Rich ◽  
Main Engine

This paper proposes a one-sector multigroup growth model with endogenous labor supply in discrete time. Proposing an alternative approach to behavior of households, we examine the dynamics of wealth and income distribution in a competitive economy with capital accumulation as the main engine of economic growth. We show how human capital levels, preferences, and labor force of heterogeneous households determine the national economic growth, wealth, and income distribution and time allocation of the groups. By simulation we demonstrate, for instance, that in the three-group economy when the rich group's human capital is improved, all the groups will economically benefit, and the leisure times of all the groups are reduced but when any other group's human capital is improved, the group will economically benefit, the other two groups economically lose, and the leisure times of all the groups are increased.

scholarly journals THE RICH AND THE POOR IN A SIMPLE MODEL OF GROWTH AND DISTRIBUTION

2016 ◽  
Vol 20 (7) ◽  
pp. 1934-1952 ◽  
Author(s):  
Kirill Borissov
Keyword(s):  
Economic Growth ◽  
Steady State ◽  
Simple Model ◽  
Disposable Income ◽  
State Equilibrium ◽  
Positional Concerns ◽  
The Poor ◽  
The Rich ◽  
Intertemporal Equilibrium ◽  
Unique Steady State

We consider a model of economic growth with altruistic agents who care about their consumption and the disposable income of their offspring. The agents' consumption and the offspring's disposable income are subject to positional concerns. We show that, if the measure of consumption-related positional concerns is sufficiently low and/or the measure of offspring-related positional concerns is sufficiently high, then there is a unique steady-state equilibrium, which is characterized by perfect income and wealth equality, and all intertemporal equilibira converge to it. Otherwise, in steady-state equilibria, the population splits into two classes, the rich and the poor; under this scenario, in any intertemporal equilibrium, all capital is eventually owned by the households that were the wealthiest from the outset and all other households become poor.

On the Effectiveness of Growth- Enhancing Policies in a Model of Growth Without Scale Effects

2002 ◽  
Vol 3 (3) ◽  
pp. 339-346 ◽  
Author(s):  
Lutz G. Arnold
Keyword(s):  
Economic Growth ◽  
Growth Rate ◽  
Human Capital ◽  
Population Growth ◽  
Capital Accumulation ◽  
Scale Effects ◽  
Growth Models ◽  
Empirical Studies ◽  
Human Capital Accumulation ◽  
Accelerate Growth

Abstract Standard R&D growth models have two disturbing properties: the presence of scale effects (i.e., the prediction that larger economies grow faster) and the implication that there is a multitude of growth-enhancing policies. Recent models of growth without scale effects, such as Segerstrom's (1998), not only remove the counterfactual scale effect, but also imply that the growth rate does not react to any kind of economic policy. They share a different disturbing property, however: economic growth depends positively on population growth, and the economy cannot grow in the absence of population growth. The present paper integrates human capital accumulation into Segerstrom's (1998) model of growth without scale effects. Consistent with many empirical studies, growth is positively related not to population growth, but to investment in human capital. And there is one way to accelerate growth: subsidizing education.

scholarly journals Education, Income, Wealth Inequality and Business Cycles in a General Equilibrium Growth Model

2020 ◽  
Vol 26 (4) ◽  
Keyword(s):  
Economic Growth ◽  
Human Capital ◽  
Business Cycles ◽  
General Equilibrium ◽  
Growth Model ◽  
Open Economy ◽  
Wealth Inequality ◽  
Learning By Doing ◽  
Government Subsidy ◽  
Wealth Inequalities

The paper is concerned with the dynamic interactions between physical capital, human capital, income and wealth inequalities between different households with government subsidy to education. It generalizes the endogenous growth model of a small-open economy proposed by Zhang (2016). Zhang’s paper deals with income and wealth inequalities between heterogeneous households with government subsidy to education. The paper makes a contribution to the literature of economic growth with endogenous education by integrating Solow-Uzawa’s neoclassical growth theory, Uzawa-Lucas model, Arrow’s learning by doing, Zhang’s creative leisure, and Walrasian general equilibrium theory. The model treats endogenous capital and human capital accumulation as the main engines of economic growth. This study generalizes Zhang’s model by allowing constant coefficients to be time-dependent. We simulate the generalized model to demonstrate existence of business cycles due to various exogenous periodic shocks.

scholarly journals Network effects in a human capital based economic growth model

2009 ◽  
Vol 388 (11) ◽  
pp. 2207-2214 ◽  
Author(s):  
Teresa Vaz Martins ◽  
Tanya Araújo ◽  
Maria Augusta Santos ◽  
Miguel St Aubyn
Keyword(s):  
Economic Growth ◽  
Human Capital ◽  
Growth Model ◽  
Network Effects ◽  
Economic Growth Model

THE MACROECONOMIC EFFECTS OF ENHANCED REFORMS IN CHINA

2019 ◽  
Vol 65 (06) ◽  
pp. 1619-1644
Author(s):  
ZHIHONG JIAN ◽  
YEQING YANG
Keyword(s):  
Economic Growth ◽  
Adverse Effect ◽  
Growth Rate ◽  
Steady State ◽  
Average Intensity ◽  
Potential Growth ◽  
Economic Growth Rate ◽  
Short Run ◽  
Macroeconomic Effects

Motivated by the idea that substantive reforms in China always happen intermittently and randomly, this paper constructs an RBC model, augmented with a shock that reflects the role of reforms and its randomly occurring character, to investigate the macroeconomic effects of enhancing the reform intensity. An increase in the average intensity of reforms leads to a higher economic growth rate permanently and provides sustainable support for economy when the potential growth rate declines. But it decreases the ergodic steady state of the detrended output, and this could have an adverse effect on economic growth in the short run.

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