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(Fractional) beta convergence

  • Michelacci, Claudio
  • Zaffaroni, Paolo

Unit roots in output, an exponential 2 per cent rate of convergence and no change in the underlying dynamics of output seem to be three stylized facts that cannot go together. This paper extends the Solow-Swan growth model allowing for cross-sectional heterogeneity. In this framework, aggregate shocks might vanish at a hyperbolic rather than at an exponential rate.

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Article provided by Elsevier in its journal Journal of Monetary Economics.

Volume (Year): 45 (2000)
Issue (Month): 1 (February)
Pages: 129-153

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Handle: RePEc:eee:moneco:v:45:y:2000:i:1:p:129-153
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