The dynamics of structural change under risk influence
The paper is concerned with structural change in the growth process and the role of uncertainty. Uncertainty is conceived as the means of removing the obstacles of growth through the activation of knightian entrepreneurship. A dynamic stochastic model of continuous-time growth is proposed. The paper concludes that uncertainty affects economic growth and the rate of returns, and causes structural changes in portfolio shares of the two types of entrepreneurial events. Structural change depends mainly on intertemporal rate of substitution, productivity ratios, and finally intersectoral difference in return and risk.
Volume (Year): 15 (2005)
Issue (Month): 7 ()
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- Liutang Gong & Heng-fu Zou, 2001.
"Direct preferences for wealth, the risk premium puzzle, growth, and policy effectiveness,"
CEMA Working Papers
53, China Economics and Management Academy, Central University of Finance and Economics.
- Gong, Liutang & Zou, Heng-fu, 2002. "Direct preferences for wealth, the risk premium puzzle, growth, and policy effectiveness," Journal of Economic Dynamics and Control, Elsevier, vol. 26(2), pages 247-270, February.
- Baumol, William J & Blackman, Sue Anne Batey & Wolff, Edward N, 1985.
"Unbalanced Growth Revisited: Asymptotic Stagnancy and New Evidence,"
American Economic Review,
American Economic Association, vol. 75(4), pages 806-17, September.
- Baumol, William J. & Batey Blackman, Sue Anne & Wolff, Edward N., 1984. "Unbalanced Growth Revisited: Asymptotic Stagnancy and New Evidence," Working Papers 84-02, C.V. Starr Center for Applied Economics, New York University.
- Montobbio, Fabio, 2002.
"An evolutionary model of industrial growth and structural change,"
Structural Change and Economic Dynamics,
Elsevier, vol. 13(4), pages 387-414, December.
- Fabio Montobbio, 2000. "An Evolutionary Model of Industrial Growth and Structural Change," KITeS Working Papers 121, KITeS, Centre for Knowledge, Internationalization and Technology Studies, Universita' Bocconi, Milano, Italy, revised Nov 2000.
- Stephen J. Turnovsky, 2000. "Methods of Macroeconomic Dynamics, 2nd Edition," MIT Press Books, The MIT Press, edition 2, volume 1, number 0262201232.
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