IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/74107.html
   My bibliography  Save this paper

Increasing Returns in a Model With Creative and Physical Capital: Does a Balanced Growth Path Exist?

Author

Listed:
  • Batabyal, Amitrajeet

Abstract

In this note we study aspects of economic growth in a region that produces a final consumption good with creative and physical capital. This consumption good is manufactured with a production function that exhibits increasing returns to scale. Our analysis leads to three results. First, we compute the growth rate of creative capital in our regional economy. Second, we show that despite the presence of increasing returns, the regional economy under study converges to a balanced growth path (BGP). Finally, we compute the growth rates of physical capital and output on the BGP.

Suggested Citation

  • Batabyal, Amitrajeet, 2016. "Increasing Returns in a Model With Creative and Physical Capital: Does a Balanced Growth Path Exist?," MPRA Paper 74107, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:74107
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/74107/1/MPRA_paper_74107.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Donovan, Pierce J. & Batabyal, Amitrajeet A., 2015. "On economic growth and investment income taxation in a creative region," International Review of Economics & Finance, Elsevier, vol. 38(C), pages 67-72.
    2. Amitrajeet Batabyal & Peter Nijkamp, 2013. "The creative class, its preferences, and unbalanced growth in an urban economy," Journal of Evolutionary Economics, Springer, vol. 23(1), pages 189-209, January.
    3. Usman, Umer & Batabyal, Amitrajeet A., 2014. "Goods production, learning by doing, and growth in a region with creative and physical capital," International Review of Economics & Finance, Elsevier, vol. 33(C), pages 92-99.
    4. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
    5. Roberta Capello & Andrea Caragliu & Peter Nijkamp, 2009. "Territorial Capital and Regional Growth: Increasing Returns in Cognitive Knowledge Use," Tinbergen Institute Discussion Papers 09-059/3, Tinbergen Institute.
    6. Amitrajeet Batabyal & Peter Nijkamp, 2010. "Richard Florida’s creative capital in a trading regional economy: a theoretical investigation," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 44(2), pages 241-250, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Amitrajeet A. Batabyal & Peter Nijkamp, 2018. "A Two-Sector Model of Creative Capital Driven Regional Economic Growth," Journal of Quantitative Economics, Springer;The Indian Econometric Society (TIES), vol. 16(3), pages 831-840, September.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Amitrajeet A. BATABYAL, 2016. "Increasing Returns In A Model With Creative And Physical Capital: Does A Balanced Growth Path Exist?," Regional Science Inquiry, Hellenic Association of Regional Scientists, vol. 0(3), pages 31-35, December.
    2. Sasaki, Hiroaki, 2020. "Is growth declining in the service economy?," Structural Change and Economic Dynamics, Elsevier, vol. 53(C), pages 26-38.
    3. Batabyal, Amitrajeet & Beladi, Hamid, 2014. "The equilibrium allocation of creative capital to R&D in a dynamic creative region," MPRA Paper 72325, University Library of Munich, Germany.
    4. Amitrajeet A. Batabyal & Peter Nijkamp, 2018. "A Two-Sector Model of Creative Capital Driven Regional Economic Growth," Journal of Quantitative Economics, Springer;The Indian Econometric Society (TIES), vol. 16(3), pages 831-840, September.
    5. John Baffoe-Bonnie, 2016. "Productivity Growth and Input Demand: The Effect of Learning by Doing in a Gold Mining Firm in a Developing Economy," International Economic Journal, Taylor & Francis Journals, vol. 30(4), pages 550-570, October.
    6. Donovan, Pierce J. & Batabyal, Amitrajeet A., 2015. "On economic growth and investment income taxation in a creative region," International Review of Economics & Finance, Elsevier, vol. 38(C), pages 67-72.
    7. Daniel Ştefan Armeanu & Georgeta Vintilă & Ştefan Cristian Gherghina, 2017. "Empirical Study towards the Drivers of Sustainable Economic Growth in EU-28 Countries," Sustainability, MDPI, vol. 10(1), pages 1-22, December.
    8. Jung-Suk Yu & M. Kabir Hassan & Abdullah Mamun & Abul Hassan, 2014. "Financial Sectors Reform and Economic Growth in Morocco: An Empirical Analysis," Journal of Emerging Market Finance, Institute for Financial Management and Research, vol. 13(1), pages 69-102, April.
    9. repec:zbw:rwidps:0030 is not listed on IDEAS
    10. Kawalec Paweł, 2020. "The dynamics of theories of economic growth: An impact of Unified Growth Theory," Economics and Business Review, Sciendo, vol. 6(2), pages 19-44, June.
    11. Iamsiraroj, Sasi, 2016. "The foreign direct investment–economic growth nexus," International Review of Economics & Finance, Elsevier, vol. 42(C), pages 116-133.
    12. van de Klundert, T.C.M.J. & Smulders, J.A., 1991. "Reconstructing growth theory : A survey," Other publications TiSEM 19355c51-17eb-4d5d-aa66-b, Tilburg University, School of Economics and Management.
    13. Siemiński, Paweł & Hadyński, Jakub & Poczta, Walenty, 2020. "Diversification Of Human Capital Resources In Rural And Urban Areas In Poland," Roczniki (Annals), Polish Association of Agricultural Economists and Agribusiness - Stowarzyszenie Ekonomistow Rolnictwa e Agrobiznesu (SERiA), vol. 2020(1).
    14. Eckstein, Zvi & Zilcha, Itzhak, 1994. "The effects of compulsory schooling on growth, income distribution and welfare," Journal of Public Economics, Elsevier, vol. 54(3), pages 339-359, July.
    15. Alhassan Abdul-Wakeel Karakara & Evans Osabuohien, 2020. "ICT adoption, competition and innovation of informal firms in West Africa: a comparative study of Ghana and Nigeria," Journal of Enterprising Communities: People and Places in the Global Economy, Emerald Group Publishing Limited, vol. 14(3), pages 397-414, June.
    16. Kumar, Sanjesh & Singh, Baljeet, 2019. "Barriers to the international diffusion of technological innovations," Economic Modelling, Elsevier, vol. 82(C), pages 74-86.
    17. Aurelio Bruzzo & Marco Ricci Petitoni, 2012. "Lineamenti teorici dell’economia dell’istruzione," Working Papers 2012011, University of Ferrara, Department of Economics.
    18. Catherine Baumont, 1995. "Urban economics and endogenous dynamics in regional growth [Economies d'agglomération et dynamique endogène de croissance des régions]," Working Papers hal-01527237, HAL.
    19. Guy Michaels, 2011. "The Long Term Consequences of Resource‐Based Specialisation," Economic Journal, Royal Economic Society, vol. 121(551), pages 31-57, March.
    20. Richard M. H. Suen, 2014. "Time Preference And The Distributions Of Wealth And Income," Economic Inquiry, Western Economic Association International, vol. 52(1), pages 364-381, January.
    21. Johannes W. Fedderke & John M. Luiz, 2005. "Does Human Generate Social and Institutional Capital? Exploring Evidence From Time Series Data in a Middle Income Country," Working Papers 029, Economic Research Southern Africa.

    More about this item

    Keywords

    Balanced Growth Path; Creative Capital; Creative Region; Economic Growth; Increasing Returns;
    All these keywords.

    JEL classification:

    • D20 - Microeconomics - - Production and Organizations - - - General
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:74107. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.