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Growth volatility and technical progress: a simple rent-seeking model

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Author Info
Charles Ka-Yui Leung
Sam Hak Kan Tang
Nicolaas Groenewold

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Abstract

Recent empirical evidence demonstrates that a higher level of technical progress is associated with a lower level of growth volatility and higher expected economic growth. This paper builds a simple growth model which combines the insights of Angeletos and Kollintzas (2000) and Tse (2000, 2001, 2002) with endogenous productivity growth and rent-seeking behavior to account for these stylized facts. Our model also complements the literature that focuses on the heterogeneity of different agents. Future research directions are also discussed.

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Paper provided by Chinese University of Hong Kong, Department of Economics in its series Departmental Working Papers with number _174.

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Date of creation: Nov 2005
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Handle: RePEc:chk:cuhked:_174

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Related research
Keywords: volatility of economic growth; technical progress; rent-seeking; stabilization policy; institution.;

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Find related papers by JEL classification:
E30 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - General (includes Measurement and Data)
O11 - Economic Development, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
O40 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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Cited by:
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  1. Shuanglin Lin & Wei Zhang, 2009. "The effect of corruption on capital accumulation," Journal of Economics, Springer, vol. 97(1), pages 67-93, May. [Downloadable!] (restricted)
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