IS THE SPEED OF CONVERGENCE A GOOD PROXY FOR THE TRANSITIONAL GROWTH PATH?

Chris Papageorgiou () and Fidel Perez Sebastian

Working Papers. Serie AD from Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie)

Abstract: This paper compares transitional dynamics in two alternative R&D non-scale growth models; one includes endogenous human capital, whereas the other does not. We show that focusing on the speed of convergence to discriminate between the two models can be misleading. Our analysis suggests that a better alternative to discriminate between different growth theories is studying the whole adjustment path predicted by them. In addition, we find that the introduction of human capital makes the speed of convergence predicted by the model much less sensitive to exogenous shocks. This last result offers theoretical support to the similar convergence speeds estimated by the literature in different samples.

Keywords: Convergence; R&D; human capital; asymptotic speed; transitional dynamics (search for similar items in EconPapers)
JEL-codes: O33 O41 O47 (search for similar items in EconPapers)
Pages: 22 pages
Date: 2005-11
New Economics Papers: this item is included in nep-dev
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Published by Ivie

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http://www.ivie.es/downloads/docs/wpasad/wpasad-2005-33.pdf Fisrt version / Primera version, 2005 (application/pdf)

Related works:
Working Paper: Is the Speed of Convergence a Good Proxy for the Transitional Growth Path? (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:ivi:wpasad:2005-33

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