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Growth volatility and technical progress: a simple rent-seeking model

  • Charles Ka-Yui Leung
  • Sam Hak Kan 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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Paper provided by Chinese University of Hong Kong, Department of Economics in its series Departmental Working Papers with number _174.

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Date of creation: Nov 2005
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Handle: RePEc:chk:cuhked:_174
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