From Balanced Growth to Innovation Cycles: A Solow-Type Semi-Endogenous Growth Model

Cuong Le Van (), Tin Nguyen-Trong (), Ngoc-Sang Pham and Thi Kim Cuong Pham ()
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Cuong Le Van: PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - ENPC - École nationale des ponts et chaussées - IP Paris - Institut Polytechnique de Paris, TIMAS, Thang Long University, CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, UP1 - Université Paris 1 Panthéon-Sorbonne
Tin Nguyen-Trong: EconomiX - EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique
Thi Kim Cuong Pham: EconomiX - EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique

Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) from HAL

Abstract: We develop a growth model with an R&D sector in which the elasticity of innovation with respect to existing knowledge can be negative. We investigate the existence and uniqueness of a balanced growth path (BGP) and derive closed-form growth factors, showing that productivity and output growth are semi-endogenous and population-driven. We also establish the global stability under a general production function. Under testable parameter restrictions, the economy converges to the BGP. However, when the knowledge elasticity is sufficiently low, a Jacobian-based condition implies instability, and an N-period innovation cycle can emerge. Comparative statics are conducted to explore the impact of several factors, including research efficiency, input elasticity, and population growth. Numerical simulations map out transitions and mark the points at which stability is lost. They make clear when innovation frictions endanger balanced growth and provide practical guidance for R&D and demographic policy.

Keywords: Population-driven growth; Balanced growth path; Stability; Instability; Innovation; Monotone dynamical system; Knowledge; Semi-endogenous growth (search for similar items in EconPapers)
Date: 2026-09-30
New Economics Papers: this item is included in nep-sbm
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Working Paper: From Balanced Growth to Innovation Cycles: A Solow-Type Semi-Endogenous Growth Model (2026)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:cesptp:hal-05770311

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