Land Price Dynamics in a Two-Sector Growth Model
Wei-Bin Zhang ()
International Journal of Economics and Empirical Research (IJEER), 2015, vol. 3, issue 1, 25-38
This study builds a two-sector growth model with endogenous wealth accumulation and land price. The economy consists of industrial and agricultural sectors. Methodology: The model is based on the neoclassical growth theory and Ricardian theory. The householdâ€™s decision is modeled with an alternative approach proposed by Zhang two decades ago. By simulation, we demonstrate that the economic system has a unique stable steady state. The study conducts comparative dynamic analysis with regard to changes in the preference and the two sectorsâ€™ output elasticities of capital. Findings: Our results demonstrate that economic growth is in tandem with land prices. Recommendations: We show this often-mentioned empirical conclusion in an integrated neoclassical growth theory and Ricardian theory.
Keywords: Land Value and Rent; Growth Model; Wealth Accumulation; Economic Structure (search for similar items in EconPapers)
JEL-codes: D13 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:ijr:journl:v:3:y:2015:i:1:p:25-38
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