Nonlinear Dynamics, Spillovers and Growth in the G7 Economies: An Empirical Investigation

Lucio Sarno

No 2537, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: This paper proposes an empirical growth model which is consistent with a stochastic steady-state labour productivity level varying over time and across countries, where the disequilibrium mechanism leading to long-run equilibrium follows a nonlinear equilibrium correction model. Using data for the G7 economies during the postwar period since 1950, the empirical analysis yields a long-run model which implies plausible estimates of the production function parameters. Postwar economic growth in each of the G7 countries appears to be well characterized by a nonlinear equilibrium correction model where the dynamic adjustment towards long-run equilibrium is governed by a logistic function, while also capturing spillover effects in growth dynamics.

Keywords: Economic growth; Nonlinear dynamics; Equilibrium correction; Spillover (search for similar items in EconPapers)
JEL-codes: C32 F43 O40 (search for similar items in EconPapers)
Date: 2000-08
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Journal Article: Nonlinear Dynamics, Spillovers and Growth in the G7 Economies: An Empirical Investigation (2001)
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