Growing Through Cycles

Kiminori Matsuyama

No 40, Economics Series from Institute for Advanced Studies

Abstract: This paper presents models of growth, which put the neoclassical and neo-Schumpetarian growth models in a unified framework. In doing so, it is argued that these two views of growth, one based on factor accumulation and the other based on innovation, are complementary in that they may capture different phases of a single growth experience. It is shown that, under an empirically plausible condition, the economy achieves sustainable growth through cycles, perpetually moving back and forth between two phases. One phase is characterized by higher output growth, higher investment, no innovation and a competitive market structure. The other phase is characterized by lower output growth, lower investment, high innovation, and a more monopolistic market structure. Both investment and innovation are essential in sustaining growth indefinitely, and yet the only one of them appears to play a dominant role in each phase.

Keywords: Endogenous Growth; Endogenous Fluctuations; Global Analysis of Nonlinear Dynamical Systems (search for similar items in EconPapers)
JEL-codes: E22 E32 O31 (search for similar items in EconPapers)
Pages: 35 pages
Date: 1996-12
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Citations: View citations in EconPapers (3)

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https://irihs.ihs.ac.at/id/eprint/956 First version, 1996 (application/pdf)

Related works:
Journal Article: Growing Through Cycles (1999)
Working Paper: Growing through cycles (1996)
Working Paper: Growing Through Cycles (1996)
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