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On the Stability of Balanced Growth

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Author Info
Jan Wenzelburger () (Keele University, Centre for Economic Research and School of Economic and Management Studies)
Volker Böhm (Dept. of Business Administration and Economics, Bielefeld University,)
Thorsten Pampel (Dept. of Business Administration and Economics, Bielefeld University,)

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Abstract

Common folklore in growth theory suggests that the stability of balanced growth paths in the capital-labor space is essentially guaranteed by conditions which imply stability of the corresponding steady states of the models in intensity form. We show by means of simple examples that, in general, these well-known conditions are only necessary. For a class of deterministic growth models with discrete time we provide new structural insights into the nature of this phenomenon by stating additional requirements that ensure stability of balanced growth paths in the original capital-labor space. We introduce a notion of path-wise convergence for stochastic growth models and generalize our sufficient conditions to the stochastic case.

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File URL: http://www.keele.ac.uk/depts/ec/wpapers/kerp0709.pdf
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Publisher Info
Paper provided by Centre for Economic Research, Keele University in its series Keele Economics Research Papers with number KERP 2007/09.

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Length: 25 pages
Date of creation: Aug 2007
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Handle: RePEc:kee:kerpuk:2007/09

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Postal: Department of Economics, University of Keele, Keele, Staffordshire, ST5 5BG - United Kingdom
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Web page: http://www.keele.ac.uk/depts/ec/cer/
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Postal: Centre for Economic Research, Research Institute for Public Policy and Management, Keele University, Staffordshire ST5 5BG - United Kingdom
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Web: http://www.keele.ac.uk/depts/ec/cer/pubs_kerps.htm

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Related research
Keywords: Balanced growth stability conditions stochastic growth pathwise convergence.

Find related papers by JEL classification:
O41 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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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.:
  1. Ruthira Naraidoo & Patrick Minford & Ioannis A. Venetis, 2006. "The political economy of unemployment and threshold effects. A nonlinear time series approach," Keele Economics Research Papers KERP 2006/21, Centre for Economic Research, Keele University. [Downloadable!]
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This page was last updated on 2008-7-20.


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