Economic Growth and Macroeconomic Dynamics: Recent Developments in Economic Theory

Cover......Page 1
Half-title......Page 3
Title......Page 5
Copyright......Page 6
Contents......Page 7
Preface......Page 9
PART ONE: TOPICS IN GROWTH THEORY......Page 11
PART TWO: STATISTICAL ISSUES IN ECONOMIC GROWTH AND DYNAMICS......Page 12
PART THREE: DYNAMIC ISSUES IN INTERNATIONAL ECONOMICS......Page 13
Contributors......Page 15
PART ONE Topics in Growth Theory......Page 19
1 Growth and the Elasticity of Factor Substitution......Page 21
I......Page 22
II......Page 24
III......Page 30
APPENDIX......Page 32
1. INTRODUCTION......Page 36
2. STATUS-SEEKING: AN OVERVIEW......Page 38
3.1. Assumptions and Notation......Page 40
3.2. The Benchmark Scenario: The Social Planner’s Problem......Page 42
3.3. Individual Optimization......Page 43
4. A MODIFIED ENDOGENOUS GROWTH MODEL......Page 45
4.1.1. The Social Planner’s Problem......Page 46
4.1.2. The Laissez-Faire Outcome......Page 48
4.2.1. The Social Planner’s Problem......Page 50
5.1. The Model......Page 52
5.2. Steady States......Page 54
5.3. Catching Up: Stability Analysis......Page 57
6. CONCLUDING REMARKS......Page 58
APPENDIX: PROOF OF PROPOSITION 2.6......Page 59
REFERENCES......Page 62
1. INTRODUCTION......Page 64
2.1. The Need for Growth Models Where Knowledge Creation Is Endogenous......Page 67
2.2. The Limits of the AK Approach......Page 70
2.3. A Schumpeterian Model with Capital Accumulation......Page 73
3.1. Two Main Channels for Technology Transfers......Page 78
3.2. Facilitating Technology Transfers: Education and Infrastructure......Page 81
3.3. Cross-Country Convergence Analysis Revisited......Page 83
3.3.1. R&D Spillovers......Page 84
3.3.3. The Nelson–Phelps Approach to Human Capital......Page 88
3.3.4. Neoclassical Convergence versus Technological Catch-Up......Page 91
4. CONCLUSIONS......Page 93
REFERENCES......Page 95
PART TWO Statistical Issues in Growth and Dynamics......Page 99
DELINEARIZING THE NEOCLASSICAL CONVERGENCE MODEL......Page 101
THE FIRST-ORDER APPROXIMATION TO THE TRANSITIONAL DYNAMICS OF THE SOLOW–SWAN MODEL......Page 102
DERIVING THE EXACT DYNAMICS OF THE SOLOW–SWAN MODEL......Page 107
LINEAR AND NONLINEAR ESTIMATION METHODS......Page 108
CONCLUDING COMMENTS......Page 110
REFERENCES......Page 111
1. INTRODUCTION......Page 113
2. STABILITY......Page 114
3. BIFURCATIONS IN MACROECONOMICS......Page 116
3.1. Transcritical Bifurcations......Page 117
3.2. Pitchfork Bifurcations......Page 118
3.3. Saddle-Node Bifurcations......Page 120
3.4. Hopf Bifurcations......Page 122
4. SINGULARITY-INDUCED BIFURCATIONS......Page 123
REFERENCES......Page 129
PART THREE Dynamic Issues in International Economics......Page 131
1. INTRODUCTION......Page 133
2. THE MODEL......Page 138
3. BALANCED GROWTH PATHS......Page 142
4. DYNAMIC TRADE CREATION AND THE GROWTH EFFECTS OF CUSTOMS UNIONS......Page 145
5. THE GROWTH EFFECTS OF A FREE TRADE AREA......Page 149
6. CONCLUSION......Page 152
REFERENCES......Page 154
1. INTRODUCTION......Page 156
2.1. Private Sector......Page 161
2.2. Public Capital, Transfers, and National Debt......Page 164
2.3. Macroeconomic Equilibrium......Page 166
2.4. Steady-State Equilibrium......Page 167
2.5. Equilibrium Dynamics......Page 168
3. NUMERICAL ANALYSIS OF TRANSITIONAL DYNAMICS......Page 169
3.1. A Permanent Foreign Aid Shock: Long-Run Effects......Page 171
3.1.1. Tied Transfer......Page 173
3.2. The Effectiveness of Foreign Aid and the Elasticity of Substitution......Page 178
3.3. Transitional Dynamics......Page 179
5. WELFARE SENSITIVITY TO INVESTMENT COSTS AND CAPITAL MARKET IMPERFECTIONS......Page 182
6. CONCLUSIONS......Page 185
REFERENCES......Page 186
1. INTERNATIONAL TRADE AND CHURNING AT THE MICROLEVEL......Page 189
2. FOLLOWERS LEAPFROGGING LEADERS......Page 192
3. CONCLUDING REMARKS......Page 195
REFERENCES......Page 196
Index......Page 197