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Neoclassical Models of Endogenous Growth: The Effects of Fiscal Policy, Innovation and Fluctuations

In: Handbook of Economic Growth

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  • Jones, Larry E.
  • Manuelli, Rodolfo E.

Abstract

Despite its role as the centerpiece of modern growth theory, the Solow model is decidedly silent on some of its basic questions: Why is average growth in per capita income so much higher now than it was 200 years ago? Why is per capita income so much higher in the member countries of the OECD than in the less developed countries (LDC) of the world? In this chapter we review the recent literature on endogenous growth. We concentrate on convex models and we restrict attention to the case in which markets are competitive.After a brief review of the basic mechanisms that produces growth, we concentrate on three topics: the impact of fiscal policies on growth, the role of innovation and the relationship between uncertainty and growth.

Suggested Citation

  • Jones, Larry E. & Manuelli, Rodolfo E., 2005. "Neoclassical Models of Endogenous Growth: The Effects of Fiscal Policy, Innovation and Fluctuations," Handbook of Economic Growth,in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 1, pages 13-65 Elsevier.
  • Handle: RePEc:eee:grochp:1-01
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    References listed on IDEAS

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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Russia Growth Diagnostics (5): Uncertainty
      by Anton Tarasenko in Economics and Development on 2015-08-20 18:39:33

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    Cited by:

    1. Raouf Boucekkine & Patrick Pintus & Benteng Zou, 2015. "Stochastic stability of endogenous growth:Theory and applications," CREA Discussion Paper Series 15-09, Center for Research in Economic Analysis, University of Luxembourg.
    2. Long Xin & Pelloni Alessandra, 2011. "Welfare improving taxation on savings in a growth model," wp.comunite 0091, Department of Communication, University of Teramo.
    3. Robert Feicht & Wolfgang Stummer, 2010. "Complete Closed-form Solution to a Stochastic Growth Model and Corresponding Speed of Economic Recovery preliminary," DEGIT Conference Papers c015_041, DEGIT, Dynamics, Economic Growth, and International Trade.
    4. Koethenbuerger, Marko & Lockwood, Ben, 2010. "Does tax competition really promote growth?," Journal of Economic Dynamics and Control, Elsevier, vol. 34(2), pages 191-206, February.
    5. Andrew Atkeson & Ariel Burstein, 2011. "Aggregate implications of innovation policy," Staff Report 459, Federal Reserve Bank of Minneapolis.
    6. Patrick Bolton & Neng Wang & Jinqiang Yang, 2015. "Liquidity and Risk Management: Coordinating Investment and Compensation Policies," NBER Working Papers 20979, National Bureau of Economic Research, Inc.
    7. Ivan O. KITOV, 2009. "The Evolution Of Real Gdp Per Capita In Developed Countries," Journal of Applied Economic Sciences, Spiru Haret University, Faculty of Financial Management and Accounting Craiova, vol. 4(2(8)_ Sum).
    8. Litina, Anastasia & Palivos, Theodore, 2010. "The Behavior Of The Saving Rate In The Neoclassical Optimal Growth Model," Macroeconomic Dynamics, Cambridge University Press, vol. 14(04), pages 482-500, September.
    9. Onyimadu, Chukwuemeka, 2015. "Does Financial Constraints Impede Growth Convergence? Evidence From ECOWAS," MPRA Paper 77205, University Library of Munich, Germany.
    10. Karl-Johan Lundquist & Lars-Olof Olander, 2010. "Growth cycles: transformation and regional development," SRE-Disc sre-disc-2010_04, Institute for Multilevel Governance and Development, Department of Socioeconomics, Vienna University of Economics and Business.
    11. Boucekkine, Raouf & Pintus, Patrick A. & Zou, Benteng, 2018. "Mean growth and stochastic stability in endogenous growth models," Economics Letters, Elsevier, vol. 166(C), pages 18-24.
    12. Soytas, Ugur & Sari, Ramazan, 2009. "Energy consumption, economic growth, and carbon emissions: Challenges faced by an EU candidate member," Ecological Economics, Elsevier, vol. 68(6), pages 1667-1675, April.
    13. Patrick Bolton & Hui Chen & Neng Wang, 2011. "A Unified Theory of Tobin's q, Corporate Investment, Financing, and Risk Management," Journal of Finance, American Finance Association, vol. 66(5), pages 1545-1578, October.
    14. Xin Long & Robert Waldmann & Alessandra Pelloni, 2008. "Lump-Sum Taxes in a R&D Model," Working Paper series 35_08, Rimini Centre for Economic Analysis.
    15. Justin Yifu Lin & Pengfei Zhang, 2007. "Development Strategy, Optimal Industrial Structure and Economic Growth in Less Developed Countries," Development Economics Working Papers 22710, East Asian Bureau of Economic Research.
    16. Lundquist, Karl-Johan & Olander, Lars-Olof, 2010. "Growth cycles: transformation and regional development," SRE-Discussion Papers 2961, WU Vienna University of Economics and Business.
    17. repec:spr:qualqt:v:51:y:2017:i:4:d:10.1007_s11135-016-0342-1 is not listed on IDEAS
    18. Patrick Bolton & Neng Wang & Jinqiang Yang, 2016. "Liquidity and Risk Management: Coordinating Investment and Compensation Policies," 2016 Meeting Papers 1703, Society for Economic Dynamics.
    19. repec:cuf:journl:y:2018:v:19:i:1:wesselbaum is not listed on IDEAS

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    JEL classification:

    • O0 - Economic Development, Innovation, Technological Change, and Growth - - General

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