Production Lags and Growth Dynamics in an Overlapping Generations Endogenous Growth Model
AbstractThis paper analyzes growth dynamics in an endogenous growth overlapping generations model characterized by production lags in the firm-specific and average economywide capital inputs, with the growth process being endogenized by allowing for a production externality. We show that endogenous convergent fluctuations emerge, with the convergence being faster for higher values of the marginal product of labor, given the initial value of the gross growth rate - a result, otherwise impossible, if the production is a function of contemporaneous capital stock. Finally, when production is a function of lagged labor as well as lagged capital inputs, steady-state is infeasible.
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Bibliographic InfoPaper provided by University of Pretoria, Department of Economics in its series Working Papers with number 201024.
Length: 12 pages
Date of creation: Oct 2010
Date of revision:
Endogenous fluctuations; Overlapping generations; Production lags;
Find related papers by JEL classification:
- C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
- E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
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