Rich transitional dynamics, physical capital, and technology intensity

Pedro Mazeda GilBy, André Almeida and Sofia B.S.D. Castro
Authors registered in the RePEc Author Service: Pedro Mazeda Gil

Oxford Economic Papers, 2017, vol. 69, issue 3, 678-706

Abstract: This paper develops a non-scale growth model with physical capital and two types of R&D under a lab-equipment specification, where both the intensive and extensive growth margins are fully endogenous. We study analytically the long-run equilibrium and transitional dynamics properties of the model, and establish meaningful sufficient conditions for saddle-path stability. We relate the different combinations of initial conditions of the dynamical system with the observation of monotonic versus non-monotonic transitional dynamics. Our model is able to predict monotonic, hump-shaped, and inverted hump-shaped trajectories, therefore encompassing the diverse convergence behaviour observed in the empirical data on modern growth experiences.

JEL-codes: O31 O41 (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (7)

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