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Endogenous growth cycles

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Author Info
Klaus, WAELDE (European Commission-Brussels and University of Dresden-Germany and CESifo and IRES-UniversitŽ Catholique de Louvain)

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Abstract

Current explanations why a growing economy necessarily goes through periods of high and low growth predict countercyclical R&D investment. As this is very controversial from an empirical perspective, a stochastic Poisson model of endogenous growth cycles is presented where the determinants of the cyclical behaviour of R&D investment are analytically studied. Providing an explicit expression for the expected length of a cycle shows that high frequency fluctuations can indeed be understood by this approach. It is also shown how small technological improvements translate into large aggregate fluctuations.

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Publisher Info
Paper provided by Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES) in its series Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) with number 2004012.

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Length: 27
Date of creation: 01 Aug 2003
Date of revision: 15 Mar 2004
Handle: RePEc:ctl:louvir:2004012

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Related research
Keywords: Endogenous fluctuations and growth; Continuous time uncertainty;

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Find related papers by JEL classification:
E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
O41 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

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  31. Annette Vissing-Jorgensen, 2002. "Limited Asset Market Participation and the Elasticity of Intertemporal Substitution," Journal of Political Economy, University of Chicago Press, vol. 110(4), pages 825-853, August. [Downloadable!] (restricted)
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Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Theodore Palivos & Dimitrios Varvarigos, 2009. "Education and Growth: A Simple Model with Complicated Dynamics," Discussion Paper Series 2009_08, Department of Economics, University of Macedonia, revised Apr 2009. [Downloadable!]
  2. Ryo Horii, 2006. "Wants and Past Knowledge: Growth Cycles with Emerging Industries," Discussion Papers in Economics and Business 06-03, Osaka University, Graduate School of Economics and Osaka School of International Public Policy (OSIPP). [Downloadable!]
    Other versions:
  3. Patrick Francois & Huw Lloyd-Ellis, 2006. "Intrinsic Business Cycles with Pro-Cyclical R&D," Working Papers 1102, Queen's University, Department of Economics. [Downloadable!]
  4. Patrick Francois & Huw Lloyd-Ellis, 2005. "Schumpeterian Restructuring," Working Papers 1039, Queen's University, Department of Economics. [Downloadable!]
  5. Philippe Aghion & George-Marios Angeletos & Abhijit Banerjee & Kalina Manova, 2005. "Volatility and Growth: Credit Constraints and Productivity-Enhancing Investment," NBER Working Papers 11349, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  6. Barnett, Richard & Bhattacharya, Joydeep, 2006. "Rejuveniles and Growth," Staff General Research Papers 12653, Iowa State University, Department of Economics. [Downloadable!]
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