National Productive Structure and Innovative Dynamics: Finding the (Endogenous) Path to Convergence
Jorge Cerdeira and
Luís Rebelo (lrebelo@porto.ucp.pt)
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Jorge Cerdeira: Faculdade de Economia - Universidade do Porto
No 12008, Working Papers de Economia (Economics Working Papers) from Católica Porto Business School, Universidade Católica Portuguesa
Abstract:
We extend the model presented in Barro and Sala-i-Martin (1997) by allowing for two types of economies - more developed and in transition to European Union integration - to both imitate and innovate varieties of intermediate goods. Besides depending on research and development expenditures, we also allow for the stochastic nature of innovation by making it also dependent on a random component. We do this by Monte Carlo simulation, using a Box-Muller process, and solve a three differential equation model by using numerical methods. Two situations are presented: a leading economy with greater institutions and more labour than the transition economy versus a situation where an institutional advance is given to the transition economy.
Keywords: stochastic innovation; transition economies; growth; technology; diffusion; convergence (search for similar items in EconPapers)
JEL-codes: O11 O30 O40 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2008-02
New Economics Papers: this item is included in nep-cmp, nep-ore and nep-tra
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Persistent link: https://EconPapers.repec.org/RePEc:cap:wpaper:012008
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