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Reinterpreting the Jones critique: A time series approach to testing and understanding idea driven growth models with transitional dynamics

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  • Sedgley, Norman
  • Elmslie, Bruce

Abstract

This paper uses the concept of cointegration and a theoretical framework that incorporates transitional dynamics to re-examine the evidence concerning empirical support for 1st generation, semi-endogenous growth, and Schumpeterian growth. The data for the post-war US economy show that the endogenous innovation approach can be broadly supported by the time series data but the limitations of time series data makes it difficult to use cointegration estimates to make sharp predictions of key model parameters that distinguish different versions of idea driven growth theory. Once capital is included in the knowledge growth model testing alternative growth frameworks can be viewed as a test of the number of cointegrating relationships between macroeconomic variables. Our results suggest a single cointegrating vector, lending some support to fully endogenous growth theories as opposed to the semi-endogenous approach.

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  • Sedgley, Norman & Elmslie, Bruce, 2010. "Reinterpreting the Jones critique: A time series approach to testing and understanding idea driven growth models with transitional dynamics," Journal of Macroeconomics, Elsevier, vol. 32(1), pages 103-117, March.
  • Handle: RePEc:eee:jmacro:v:32:y:2010:i:1:p:103-117
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Pedro Neves & Tiago Sequeira, 2017. "The Production of Knowledge: A Meta-Regression Analysis," CEFAGE-UE Working Papers 2017_03, University of Evora, CEFAGE-UE (Portugal).
    2. Pascal Da Costa, 2014. "Semi-Endogenous Growth and Pollution: No Double Dividend in the Long Term," Working Papers hal-00994904, HAL.
    3. Sedgley, Norman & Elmslie, Bruce, 2015. "Taxation and fiscal expenditure in a growth model with endogenous fertility," Economics Discussion Papers 2015-35, Kiel Institute for the World Economy (IfW).
    4. Pedro Mazeda Gil & Oscar Afonso & Paulo B. Vasconcelos, 2015. "Skill-Structure Shocks, the Share of the High-Tech Sector and Economic Growth Dynamics," FEP Working Papers 554, Universidade do Porto, Faculdade de Economia do Porto.
    5. Finn Martensen, 2013. "Globalization, Unemployment, and Product Cycles: Short- and Long-Run Effects," Working Paper Series of the Department of Economics, University of Konstanz 2013-16, Department of Economics, University of Konstanz.

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