Capital Mobility in an Open Economy Model with Embodied Productivity Growth
AbstractThe primary objective of this article is to present a framework with which to analyze development and long-run growth in a small economy. The model that is constructed can be summarized as an open economy version of the Solow-Swan growth model, in which productivity growth is embodied within the factors of production. Extending the Solow-Swan model by permitting international capital flows and trade is necessary, since the majority of the World’s economies must reasonably be considered small and open. Furthermore, restricting technological change to be embodied within capital and labor will be necessary in order for the properties of the model to coincide with recent evidence on technological change and the sources of productivity growth.
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Bibliographic InfoPaper provided by University of Guelph, Department of Economics and Finance in its series Working Papers with number 0506.
Length: 29 pages
Date of creation: 2005
Date of revision:
Publication status: Published in Kosempel, Stephen, “Interaction Between Knowledge and Technology: A Contribution to the Theory of Development,” Canadian Journal of Economics 40(4), 1237-1260, November 2007.
Convergence; Capital Mobility; Embodied Technological Change;
Find related papers by JEL classification:
- F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
- F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
- O41 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
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