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A bottleneck capital model of development

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  • Rappaport, Jordan

Abstract

A convex marginal adjustment cost allows the neoclassical growth model to match observed transition paths for output growth, savings, investment, the real interest rate, and the shadow value of installed capital. Such an adjustment cost need apply only to one of two complementary capital inputs with minimal factor income share. The interaction of complementary capital inputs blurs the distinction between capital accumulation and productivity growth.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Monetary Economics.

Volume (Year): 53 (2006)
Issue (Month): 8 (November)
Pages: 2113-2129

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Handle: RePEc:eee:moneco:v:53:y:2006:i:8:p:2113-2129

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Web page: http://www.elsevier.com/locate/inca/505566

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Cited by:
  1. Yongsung Chang & Andreas Hornstein, 2011. "Transition dynamics in the neoclassical growth model : the case of South Korea," Working Paper 11-04, Federal Reserve Bank of Richmond.
  2. Junlu Ma & Zeguang Li & Qunyong Wang, 2009. "Financial constraints, agency cost and firm’s investment behavior: Evidence from listed companies of China," Frontiers of Economics in China, Springer, vol. 4(3), pages 384-405, September.
  3. Jordan Rappaport, 1999. "How does labor mobility affect income convergence?," Research Working Paper 99-12, Federal Reserve Bank of Kansas City.

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