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Land Price Dynamics in a Two-Sector Growth Model

Author

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  • Wei-Bin Zhang

    (Ritsumeikan Asia Pacific University, Japan)

Abstract

This study builds a two-sector growth model with endogenous wealth accumulation and land price. The economy consists of industrial and agricultural sectors. Methodology: The model is based on the neoclassical growth theory and Ricardian theory. The household’s decision is modeled with an alternative approach proposed by Zhang two decades ago. By simulation, we demonstrate that the economic system has a unique stable steady state. The study conducts comparative dynamic analysis with regard to changes in the preference and the two sectors’ output elasticities of capital. Findings: Our results demonstrate that economic growth is in tandem with land prices. Recommendations: We show this often-mentioned empirical conclusion in an integrated neoclassical growth theory and Ricardian theory.

Suggested Citation

  • Wei-Bin Zhang, 2015. "Land Price Dynamics in a Two-Sector Growth Model," International Journal of Economics and Empirical Research (IJEER), The Economics and Social Development Organization (TESDO), vol. 3(1), pages 25-38, January.
    • Handle: RePEc:ijr:journl:v:3:y:2015:i:1:p:25-38
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    References listed on IDEAS

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    Cited by:

    1. Wei-Bin Zhang, 2015. "The Dynamics of Wealth, Environment and Land Value in a Three-Sector Growth Model," South-Eastern Europe Journal of Economics, Association of Economic Universities of South and Eastern Europe and the Black Sea Region, vol. 13(2), pages 197-228.
    2. ZHANG Wei-Bin, 2015. "Values Of Land And Renewable Resources In A Three-Sector Economic Growth Model," Studies in Business and Economics, Lucian Blaga University of Sibiu, Faculty of Economic Sciences, vol. 10(1), pages 156-186, April.
    3. Zhang Wei-Bin, 2016. "Gold And Land Prices With Capital Accumulation In An Economy With Industrial And Agricultural Sectors," Annals - Economy Series, Constantin Brancusi University, Faculty of Economics, vol. 2, pages 16-29, April.

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    More about this item

    Keywords

    Land Value and Rent; Growth Model; Wealth Accumulation; Economic Structure;
    All these keywords.

    JEL classification:

    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation

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