Endogenous Risk and Growth
AbstractWhile much of recent growth literature has focused on innovation in the technology frontier, less attention has been paid to the role of the least productive agents in generating growth. We develop an analytically tractable model where growth is created as a positive externality from risk taking by individuals at the bottom of the productivity distribution learning from more productive agents. Heterogeneous firms choose to produce or pay a cost and search for a better opportunity within the economy. Sustained growth comes from the feedback between the endogenously determined distribution of productivity, as evolved by past search decisions, and an optimal forward looking search policy. The growth rate depends on characteristics of the productivity distribution, with a thicker tailed distribution leading to more growth.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Society for Economic Dynamics in its series 2012 Meeting Papers with number 479.
Date of creation: 2012
Date of revision:
Contact details of provider:
Postal: Society for Economic Dynamics Christian Zimmermann Economic Research Federal Reserve Bank of St. Louis PO Box 442 St. Louis MO 63166-0442 USA
Web page: http://www.EconomicDynamics.org/society.htm
More information through EDIRC
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-04-13 (All new papers)
- NEP-DGE-2013-04-13 (Dynamic General Equilibrium)
- NEP-INO-2013-04-13 (Innovation)
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Lagakos, David & Moll, Benjamin & Porzio, Tommaso & Qian, Nancy, 2012.
"Experience Matters: Human Capital and Development Accounting,"
CEPR Discussion Papers
9253, C.E.P.R. Discussion Papers.
- David Lagakos & Benjamin Moll & Tommaso Porzio & Nancy Qian, 2012. "Experience Matters: Human Capital and Development Accounting," Working Papers 2012-021, Human Capital and Economic Opportunity Working Group.
- David Lagakos & Benjamin Moll & Tommaso Porzio & Nancy Qian, 2012. "Experience Matters: Human Capital and Development Accounting," NBER Working Papers 18602, National Bureau of Economic Research, Inc.
- Alessandra Fogli & Laura Veldkamp, 2012.
"Germs, Social Networks and Growth,"
NBER Working Papers
18470, National Bureau of Economic Research, Inc.
- Fogli, Alessandra & Veldkamp, Laura, 2012. "Germs, Social Networks and Growth," CEPR Discussion Papers 9188, C.E.P.R. Discussion Papers.
- Alessandra Fogli & Laura Veldkamp, 2012. "Germs, Social Networks and Growth," Working Papers 12-16, New York University, Leonard N. Stern School of Business, Department of Economics.
- Laura Veldkamp & Alessandra Fogli, 2012. "Germs, Social Networks, and Growth," 2012 Meeting Papers 1074, Society for Economic Dynamics.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Christian Zimmermann).
If references are entirely missing, you can add them using this form.