EconPapers    
Economics at your fingertips  
 

Transition dynamics in the neoclassical growth model: the case of South Korea

Yongsung Chang () and Andreas Hornstein

The B.E. Journal of Macroeconomics, 2015, vol. 15, issue 2, 649-676

Abstract: Many successful examples of economic development, such as South Korea, exhibit long periods of sustained capital accumulation. This process is characterized by a gradually rising investment rate along with a moderate rate of return to capital, both of which are strongly at odds with the standard neoclassical growth model that predicts an initially high and then declining investment rate with an extremely high return to capital. We show that minor modifications of the neoclassical model go a long way toward accounting for the capital accumulation path of the South Korean economy. Our modifications recognize that (i) agriculture (which makes up a large share of the aggregate economy in the early stage of development) does not rely much on capital and (ii) the relative price of capital declined substantially during the transition period.

Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2) Track citations by RSS feed

Downloads: (external link)
https://www.degruyter.com/view/j/bejm.2015.15.issu ... -0089.xml?format=INT (text/html)
For access to full text, subscription to the journal or payment for the individual article is required.

Related works:
Working Paper: Transition dynamics in the neoclassical growth model: the case of South Korea (2011) Downloads
Working Paper: Transition Dynamics in the Neoclassical Growth Model: The Case of South Korea (2011) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bpj:bejmac:v:15:y:2015:i:2:p:649-676:n:8

Ordering information: This journal article can be ordered from
https://www.degruyter.com/view/j/bejm

Access Statistics for this article

The B.E. Journal of Macroeconomics is currently edited by Arpad Abraham and Tiago Cavalcanti

More articles in The B.E. Journal of Macroeconomics from De Gruyter
Bibliographic data for series maintained by Peter Golla ().

 
Page updated 2019-04-18
Handle: RePEc:bpj:bejmac:v:15:y:2015:i:2:p:649-676:n:8