Saving and investment in a two-sector model of endogenous growth of a small open economy
We develop a two sector model of endogenous growth. The export sector is the only sector that generates technological progress. Technological knowledge can be used by the import sector. Firms face adjustment costs for investment. The model has well defined equations for the growth rate of capital, and for the growth rate of consumption. The model has a steady state solution. We study the relation between the interest rate and the growth rate. The optimal growth rate is higher than that achieved in the market economy without government. The optimal policy is an investment subsidy in the export sector.
Volume (Year): 13 (1998)
Issue (Month): 2 ()
|Contact details of provider:|| Web page: http://www.colmex.mx/centros/cee/|
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Rauch, James E., 1992. "A note on the optimum subsidy to a learning industry," Journal of Development Economics, Elsevier, vol. 38(1), pages 233-243, January.
- Alwyn Young, 1991. "Learning by Doing and the Dynamic Effects of International Trade," NBER Working Papers 3577, National Bureau of Economic Research, Inc.
- Hayashi, Fumio, 1982.
"Tobin's Marginal q and Average q: A Neoclassical Interpretation,"
Econometric Society, vol. 50(1), pages 213-224, January.
- Fumio Hayashi, 1981. "Tobin's Marginal q and Average a : A Neoclassical Interpretation," Discussion Papers 457, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Alwyn Young, 1991. "Learning by Doing and the Dynamic Effects of International Trade," The Quarterly Journal of Economics, Oxford University Press, vol. 106(2), pages 369-405.
- Casey B. Mulligan & Xavier Sala-i-Martin, 1991. "A Note on the Time-Elimination Method For Solving Recursive Dynamic Economic Models," NBER Technical Working Papers 0116, National Bureau of Economic Research, Inc.
- Olivier Jean Blanchard & Stanley Fischer, 1989. "Lectures on Macroeconomics," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262022834, July. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:emx:esteco:v:13:y:1998:i:2:p:197-224. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Rocío Contreras)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.