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

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  • Charles Ka-Yui Leung
  • Sam Hak Kan Tang
  • Nicolaas Groenewold

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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File URL: http://www.econ.cuhk.edu.hk/~discusspaper/00016.pdf
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Bibliographic Info

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

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Cited by:
  1. Chu, Angus C. & Leung, Charles Ka Yui & TANG, C. H. Edward, 2012. "Intellectual property rights, technical progress and the volatility of economic growth," MPRA Paper 38132, University Library of Munich, Germany.
  2. Tang, Sam Hak Kan & Groenewold, Nicolaas & Leung, Charles Ka Yui, 2008. "The link between institutions, technical change and macroeconomic volatility," Journal of Macroeconomics, Elsevier, vol. 30(4), pages 1520-1549, December.
  3. Michio Naoi & Miki Seko & Kazuto Sumita, 2010. "Community Rating, Cross Subsidies and Underinsurance: Why so many Households in Japan do not Purchase Earthquake Insurance," The Journal of Real Estate Finance and Economics, Springer, vol. 40(4), pages 544-561, May.
  4. Shuanglin Lin & Wei Zhang, 2009. "The effect of corruption on capital accumulation," Journal of Economics, Springer, vol. 97(1), pages 67-93, May.

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