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Is The Speed Of Convergence A Good Proxy For The Transitional Growth Path?

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  • Chris Papageorgiou

    ()
    (Louisiana State University)

  • Fidel Pérez Sebastián

    ()
    (Universidad de Alicante)

Abstract

This paper compares transitional dynamics in two alternative R&D non-scale growth models; one includes endogenous human capital, whereas the other does not. We show that focusing on the speed of convergence to discriminate between the two models can be misleading. Our analysis suggests that a better alternative to discriminate between different growth theories is studying the whole adjustment path predicted by them. In addition, we find that the introduction of human capital makes the speed of convergence predicted by the model much less sensitive to exogenous shocks. This last result offers theoretical support to the similar convergence speeds estimated by the literature in different samples.

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File URL: http://www.ivie.es/downloads/docs/wpasad/wpasad-2005-33.pdf
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Bibliographic Info

Paper provided by Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie) in its series Working Papers. Serie AD with number 2005-33.

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Length: 22 pages
Date of creation: Nov 2005
Date of revision:
Publication status: Published by Ivie
Handle: RePEc:ivi:wpasad:2005-33

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Keywords: Convergence; R&D; human capital; asymptotic speed; transitional dynamics;

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References

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