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A continuous time model of European growth, integration and technology diffusion: The role of distance

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  • Maggi, Bernardo
  • Padoan, Pier Carlo
  • Guerrieri, Paolo

Abstract

Economists have been devoting increasing attention to the diffusion process of knowledge in economic activities. However, the models till now developed concentrate mostly on the dynamics determined by the steady state, when dealing with the interaction among many countries. Instead, we present a non-linear model where explicitly formalize the disequilibrium as starting point. We evaluate theoretically and empirically, with a continuous time analysis applied to panel data, the integration process of some main European countries by considering a simultaneous interaction among output, technology and business services. In this process we take particular care of distance, as a strategic variable over time, and of the following consequences on the convergence to the steady state. On this subject we also show a closed form solution in presence of a linear constraint on technology among countries.

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  • Maggi, Bernardo & Padoan, Pier Carlo & Guerrieri, Paolo, 2009. "A continuous time model of European growth, integration and technology diffusion: The role of distance," Economic Modelling, Elsevier, vol. 26(3), pages 631-640, May.
  • Handle: RePEc:eee:ecmode:v:26:y:2009:i:3:p:631-640
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    References listed on IDEAS

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    Cited by:

    1. Cavallaro, Eleonora & Maggi, Bernardo & Mulino, Marcella, 2011. "The macrodynamics of financial fragility within a hard peg arrangement," Economic Modelling, Elsevier, vol. 28(5), pages 2164-2173, September.
    2. Maggi, Bernardo & Muro, Daniel, 2013. "A multi-country non-linear dynamical model for the study of European growth based on technology and business services," Structural Change and Economic Dynamics, Elsevier, vol. 25(C), pages 173-187.
    3. Bernardo Maggi & Eleonora Cavallaro & Marcella Mulino, 2010. "Financial Fragility and Currency Crisis: a Macrodynamical Revisitation of the Argentina’s Experience," Working Papers - Dipartimento di Economia 8, Dipartimento di Economia, Sapienza University of Rome, revised 2010.
    4. Bernardo Maggi & Daniel Muro, 2014. "A dynamical countries-interaction model based on technology for the study of European growth and stability," DSS Empirical Economics and Econometrics Working Papers Series 2014/1, Centre for Empirical Economics and Econometrics, Department of Statistics, "Sapienza" University of Rome.
    5. Maggi Bernardo & Cavallaro Eleonora & Mulino Marcella, 2012. "The Macrodynamics of External Overborrowing and Systemic Instability in a Small Open Economy," Studies in Nonlinear Dynamics & Econometrics, De Gruyter, vol. 16(2), pages 1-27, April.
    6. Otaviano Canuto & Danny M. Leipziger, 2012. "Ascent after Decline : Regrowing Global Economies after the Great Recession," World Bank Publications, The World Bank, number 2233.

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