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Is the Asymptotic Speed of Convergence a Good Proxy for the Transitional Growth Path?

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  • CHRIS PAPAGEORGIOU
  • FIDEL PEREZ-SEBASTIAN

Abstract

This paper compares transitional dynamics in two alternative R&D non-scale growth models, one with endogenous human capital and the other without. We show that focusing only on the asymptotic speed of convergence to discriminate between the two models' performance can be misleading. Our analysis suggests that a careful study of the entire adjustment paths predicted by alternative growth models starting far away from the balanced-growth path is required in order to successfully discriminate among them. Copyright 2007 The Ohio State University.

Suggested Citation

  • Chris Papageorgiou & Fidel Perez-Sebastian, 2007. "Is the Asymptotic Speed of Convergence a Good Proxy for the Transitional Growth Path?," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 39(1), pages 1-24, February.
    • Handle: RePEc:mcb:jmoncb:v:39:y:2007:i:1:p:1-24
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    Cited by:

    1. Atolia, Manoj & Chatterjee, Santanu & Turnovsky, Stephen J., 2010. "How misleading is linearization? Evaluating the dynamics of the neoclassical growth model," Journal of Economic Dynamics and Control, Elsevier, vol. 34(9), pages 1550-1571, September.
    2. Hideyuki Kamiryo, 2014. "Earth Endogenous System: To Answer the Current Unsolved Economic Problems (Second Edition)," Earth Endogenous System: To Answer the Current Unsolved Economic Problems (Second Edition), Better Advances Press, Canada, edition 2, volume 2, number 01 edited by Dr. Yisheng Huang, May.
    3. repec:bap:ees2th:01 is not listed on IDEAS
    4. Madsen, Jakob B., 2010. "Growth and capital deepening since 1870: Is it all technological progress?," Journal of Macroeconomics, Elsevier, vol. 32(2), pages 641-656, June.
    5. Oscar Afonso & Paulo B. Vasconcelos, 2007. "Re-examining International Technological-Knowledge Diffusion," International Economic Journal, Taylor & Francis Journals, vol. 21(2), pages 279-296.
    6. Cecilia Garc√Ça-Pe√Ëalosa & Stephen J. Turnovsky, 2011. "Taxation and Income Distribution Dynamics in a Neoclassical Growth Model," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 43(8), pages 1543-1577, December.
    7. repec:bap:eebook:02 is not listed on IDEAS
    8. Oscar Afonso, 2010. "Non‐Scale Effects Of International Technological‐Knowledge Diffusion On Southern Growth And Wages," The Japanese Economic Review, Japanese Economic Association, vol. 61(3), pages 341-366, September.
    9. Dolores Guilló, María & Papageorgiou, Chris & Perez-Sebastian, Fidel, 2011. "A unified theory of structural change," Journal of Economic Dynamics and Control, Elsevier, vol. 35(9), pages 1393-1404, September.
    10. Hideyuki Kamiryo, 2014. "Earth Endogenous System: To Answer the Current Unsolved Economic Problems (Second Edition)," Earth Endogenous System: To Answer the Current Unsolved Economic Problems (Second Edition), Better Advances Press, Canada, edition 2, volume 2, number 02 edited by Yisheng Huang, May.
    11. Hiraguchi, Ryoji, 2011. "A two sector endogenous growth model with habit formation," Journal of Economic Dynamics and Control, Elsevier, vol. 35(4), pages 430-441, April.
    12. Klarl, Torben, 2016. "Pollution externalities, endogenous health and the speed of convergence in an endogenous growth model," Journal of Macroeconomics, Elsevier, vol. 50(C), pages 98-113.

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