A Dynamic CGE Model: An Application of R&D- Based Endogenous Growth Model Theory

Xinshen Diao (), Elamin H. Elbasha, Terry Roe and Erinc Yeldan

No 7461, Bulletins from University of Minnesota, Economic Development Center

Abstract: An R&D based endogenous growth - applied general equilibrium model is developed from an underlying analytical model which combines Romer's capital variety with Grossman and Helpman's multi-sector open economy model. The transitional dynamics of the analytical model are derived. For numerical implementation, a time discrete empirical model, with an Armington structure, is fit to East Asian data of the social accounting matrix variety. Simulations of trade reform are performed and their static and dynamic effects compared. The transition paths of the state variables are found to have a half-life of five to six periods. A solution of the Social Planner's problem, and interventions which seek to obtain this outcome from the decentralized model are also obtained'.

Keywords: International; Relations/Trade (search for similar items in EconPapers)
Pages: 44
Date: 1996
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Citations: View citations in EconPapers (10)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:umedbu:7461

DOI: 10.22004/ag.econ.7461

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