Openness, Human Development, and Fiscal Policies

Delano Villanueva, Roberto Mariano, Diwa C Guinigundo and Abbas Mirakhor

Chapter 6 in Economic Adjustment and Growth:Theory and Practice, 2023, pp 119-165 from World Scientific Publishing Co. Pte. Ltd.

Abstract: The basic neoclassical growth model developed by Solow (1956) and Swan (1956) has been the workhorse of growth theory for nearly four decades. Its simple structure consisting of a well-behaved neoclassical production function, investment-saving relation, and a labor growth function, is an elegant solution to the knife-edge problem posed by Harrod (1939) and Domar (1946). By allowing smooth factor substitution and wage-price flexibility, the capital/output ratio is made a monotonic function of the capital/labor ratio. The growth rate of the capital stock (the warranted rate) adjusts to the exogenously given growth rate of the labor force (the natural rate) to maintain full employment real output…

Keywords: Adjustment and Growth; Testing Growth Models; Labor Participation; Human and Intellectual Capital; Finance and Growth; Adaptive Inflationary Expectations; Learning by Doing; Optimal Saving; Sustainable Foreign Debt; Stabilization and Structural Policies; Emerging Economy Case Study (search for similar items in EconPapers)
JEL-codes: E E02 F4 O11 O4 (search for similar items in EconPapers)
Date: 2023
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Chapter: Openness, Human Development, and Fiscal Policies (2008)
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