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Growth Volatility and Technical Progress: A Simple Rent-seeking Model

  • Charles Leung


  • Sam Tang


  • Nicolaas Groenewold


Recent empirical evidence demonstrates that a higher level of technical progress is associated with a lower level of growth volatility and higher expected economic growth. This paper builds a simple growth model which combines the insights of Angeletos and Kollintzas (2000) and Tse (2000, 2001, 2002) with endogenous productivity growth and rent-seeking behavior to account for these stylized facts. Our model also complements the literature that focuses on the heterogeneity of different agents. Future research directions are also discussed.

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Article provided by Springer in its journal Journal of Economics.

Volume (Year): 88 (2006)
Issue (Month): 2 (08)
Pages: 159-178

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Handle: RePEc:kap:jeczfn:v:88:y:2006:i:2:p:159-178
DOI: 10.1007/s00712-005-0162-6
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