Transition Dynamics in Vintage Capital Models: Explaining the Postwar Catch-Up of Germany and Japan

Simon Gilchrist and John Williams

No 2004-14, Working Paper Series from Federal Reserve Bank of San Francisco

Abstract: We consider a neoclassical interpretation of Germany and Japan’s rapid postwar growth that relies on a catch-up mechanism through capital accumulation where technology is embodied in new capital goods. Using a putty-clay model of production and investment, we are able to capture many of the key empirical properties of Germany and Japan’s postwar transitions, including persistently high but declining rates of labor and total factor productivity growth, a U-shaped response of the capital-output ratio, rising rates of investment and employment, and moderate rates of return to capital.

Keywords: Economic development - Germany; Economic development - Japan; embodied technology; productivity growth; convergence (search for similar items in EconPapers)
JEL-codes: D24 E22 N10 O41 (search for similar items in EconPapers)
Date: 2004-07-01
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Citations: View citations in EconPapers (16)

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Related works:
Working Paper: Transition Dynamics in Vintage Capital Models: Explaining the Postwar Catch-Up of Germany and Japan (2004)
Working Paper: Transition Dynamics in Vintage Capital Models: Explaining the Postwar Catch-up of Germany and Japan (2001)
Working Paper: Transition dynamics in vintage capital models: explaining the postwar catch-up of Germany and Japan (2001)
Working Paper: Transition dynamics in vintage capital models: explaining the postwar catch-up of Germany and Japan (2001)
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DOI: 10.24148/wp2004-14

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