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Birth, Death, and Dynamic Inefficiency in an Endogenous Growth Model

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  • James Kahn
  • Jong-Soo Lim
  • Changyong Rhee

Abstract

This paper builds a finite horizon endogenous growth model by incorporating Lucas' (1988) human capital model into an uncertain lifetime framework a la Buiter (1988). Our finite horizon model has different policy implication from infinite horizon models. For example, a non-positive link between capital income taxation and economic growth in infinite horizon models does not hold in our finite horizon model. Also, our finite horizon model shows that the short-run macro management policy which has only the level effect in infinite horizon models can affect the long-run economic growth. [O4]

Suggested Citation

  • James Kahn & Jong-Soo Lim & Changyong Rhee, 1997. "Birth, Death, and Dynamic Inefficiency in an Endogenous Growth Model," International Economic Journal, Taylor & Francis Journals, vol. 11(3), pages 85-102.
    • Handle: RePEc:taf:intecj:v:11:y:1997:i:3:p:85-102
    DOI: 10.1080/10168739700000021
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    References listed on IDEAS

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