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On the time stability of the output-capital ratio

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  • D'Adda, Carlo
  • Scorcu, Antonello E.

Abstract

This paper is concerned with the role of the output-capital ratio in growth models. In the first part we highlight the behaviour of the output-capital ratio along the balanced growth path in the models of Solow (1956) and Romer (1986). In the second part we assess the stability of the ratio for some industrial countries.
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  • D'Adda, Carlo & Scorcu, Antonello E., 2003. "On the time stability of the output-capital ratio," Economic Modelling, Elsevier, vol. 20(6), pages 1175-1189, December.
  • Handle: RePEc:eee:ecmode:v:20:y:2003:i:6:p:1175-1189
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    1. Romer, Paul M, 1986. "Increasing Returns and Long-run Growth," Journal of Political Economy, University of Chicago Press, vol. 94(5), pages 1002-1037, October.
    2. Gregory, Allan W. & Hansen, Bruce E., 1996. "Residual-based tests for cointegration in models with regime shifts," Journal of Econometrics, Elsevier, vol. 70(1), pages 99-126, January.
    3. Kocherlakota, Narayana R & Yi, Kei-Mu, 1996. "A Simple Time Series Test of Endogenous vs. Exogenous Growth Models: An Application to the United States," The Review of Economics and Statistics, MIT Press, vol. 78(1), pages 126-134, February.
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    5. Taylor, Alan M., 1999. "Sources of convergence in the late nineteenth century," European Economic Review, Elsevier, vol. 43(9), pages 1621-1645, October.
    6. Gregory, Allan W. & Hansen, Bruce E., 1996. "Residual-based tests for cointegration in models with regime shifts," Journal of Econometrics, Elsevier, vol. 70(1), pages 99-126, January.
    7. Larry E. Jones & Rodolfo Manuelli, 1990. "A Convex Model of Equilibrium Growth," NBER Working Papers 3241, National Bureau of Economic Research, Inc.
    8. Charles I. Jones, 1995. "Time Series Tests of Endogenous Growth Models," The Quarterly Journal of Economics, Oxford University Press, vol. 110(2), pages 495-525.
    9. Lau, Sau-Him Paul & Sin, Chor-Yiu, 1997. "Observational equivalence and a stochastic cointegration test of the neoclassical and Romer's increasing returns models," Economic Modelling, Elsevier, vol. 14(1), pages 39-60, January.
    10. N. Gregory Mankiw & David Romer & David N. Weil, 1992. "A Contribution to the Empirics of Economic Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 107(2), pages 407-437.
    11. Roberto Cellini & Antonello E. Scorcu, 2000. "Segmented stochastic convergence across the G-7 countries," Empirical Economics, Springer, vol. 25(3), pages 463-474.
    12. Caballero, Ricardo J, 1994. "Small Sample Bias and Adjustment Costs," The Review of Economics and Statistics, MIT Press, vol. 76(1), pages 52-58, February.
    13. Ben S. Bernanke & Refet S. Gürkaynak, 2002. "Is Growth Exogenous? Taking Mankiw, Romer, and Weil Seriously," NBER Chapters,in: NBER Macroeconomics Annual 2001, Volume 16, pages 11-72 National Bureau of Economic Research, Inc.
    14. Feinstein, Charles H. & Temin, Peter & Toniolo, Gianni, 1997. "The European Economy Between the Wars," OUP Catalogue, Oxford University Press, number 9780198774815.
    15. Kocherlakota, Narayana R & Yi, Kei-Mu, 1997. "Is There Endogenous Long-Run Growth? Evidence from the United States and the United Kingdom," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 29(2), pages 235-262, May.
    16. Greenaway, David & Leybourne, Stephen & Sapsford, David, 2000. "Smooth Transitions and GDP Growth in the European Union," Manchester School, University of Manchester, vol. 68(2), pages 145-165, March.
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    Cited by:

    1. Cliff L.F. Attfield & Jonathan R.W. Temple, 2003. "Measuring trend output: how useful are the Great Ratios?," Bristol Economics Discussion Papers 03/555, Department of Economics, University of Bristol, UK.
    2. Carsten Trenkler & Pentti Saikkonen & Helmut Lütkepohl, 2008. "Testing for the Cointegrating Rank of a VAR Process with Level Shift and Trend Break," Journal of Time Series Analysis, Wiley Blackwell, vol. 29(2), pages 331-358, March.
    3. Attfield, Cliff & Temple, Jonathan R.W., 2010. "Balanced growth and the great ratios: New evidence for the US and UK," Journal of Macroeconomics, Elsevier, vol. 32(4), pages 937-956, December.
    4. Andri Chassamboulli & Theodore Palivos, 2010. "“Give me your Tired, your Poor,” so I can Prosper: Immigration in Search Equilibrium," University of Cyprus Working Papers in Economics 12-2010, University of Cyprus Department of Economics.
    5. Antonio E. Noriega & Daniel Ventosa-Santaulària, 2007. "Spurious Regression and Trending Variables," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 69(3), pages 439-444, June.
    6. repec:beo:journl:v:62:y:2017:i:215:p:53-80 is not listed on IDEAS
    7. Jan Mikael Malmaeus, 2016. "Economic Values and Resource Use," Sustainability, MDPI, Open Access Journal, vol. 8(5), pages 1-20, May.
    8. Antonio E. Noriega & Daniel Ventosa-Santaulària, 2006. "Spurious Regression and Econometric Trends," Working Papers 2006-05, Banco de México.
    9. Xu, Shaofeng, 2017. "Volatility risk and economic welfare," Journal of Economic Dynamics and Control, Elsevier, vol. 80(C), pages 17-33.
    10. Jakob B. Madsen & Vinod Mishra & Russell Smyth, 2012. "Is The Output–Capital Ratio Constant In The Very Long Run?," Manchester School, University of Manchester, vol. 80(2), pages 210-236, March.
    11. Karel Mertens, 2006. "How the Removal of Deposit Rate Ceilings Has Changed Monetary Transmission in the US: Theory and Evidence," Economics Working Papers ECO2006/34, European University Institute.
    12. Ventosa-Santaulària, Daniel, 2008. "Spurious Regression," MPRA Paper 59008, University Library of Munich, Germany.
    13. repec:gam:jsusta:v:8:y:2016:i:5:p:490:d:70302 is not listed on IDEAS
    14. Trofimov, Ivan D., 2017. "Capital productivity in industrialized economies: evidence from error-correction model and Lagrange Multiplier tests," MPRA Paper 81655, University Library of Munich, Germany.
    15. Xian-Liang Tian, 2017. "Estimating sectoral product quality under quality heterogeneity," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 153(1), pages 137-176, February.

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