Extending The Augmented Solow Growth Model To Explain Transitional Economies
Abstract
The development of countries in economic transition is often misunderstood. These countries are neither underdeveloped nor are they developed, they are somewhere in between. Therefore, macroeconomic models of transitional economies must include aspects of both underdeveloped and developed countries. Two such variables that should be included are institutions and learning-by-doing. Institutions that are established in the society are important because they can either hinder or accelerate economic growth. Just as important for transitional economies is learning-by-doing, as it takes time to learn how a new economic system works. This paper presents a macroeconomic model for transitional economies that extends the Augmented Solow Growth Model to incorporate learning-by-doing and institutions.Download Info
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Article provided by Institute for Economic Forecasting in its journal Romanian Journal for Economic Forecasting.
Volume (Year): 4 (2007)
Issue (Month): 1 (March)
Pages: 65-76
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Keywords: Solow growth model; transitional economies; economic development;Find related papers by JEL classification:
- O11 - Economic Development, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
- P20 - Economic Systems - - Socialist Systems and Transition Economies - - - General
- E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General
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