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Capital Mobility in an Open Economy Model with Embodied Productivity Growth

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  • Stephen Kosempel

    () (Department of Economics and Finance, University of Guelph)

Abstract

The primary objective of this article is to present a framework with which to analyze development and long-run growth in a small economy. The model that is constructed can be summarized as an open economy version of the Solow-Swan growth model, in which productivity growth is embodied within the factors of production. Extending the Solow-Swan model by permitting international capital flows and trade is necessary, since the majority of the World’s economies must reasonably be considered small and open. Furthermore, restricting technological change to be embodied within capital and labor will be necessary in order for the properties of the model to coincide with recent evidence on technological change and the sources of productivity growth.

Suggested Citation

  • Stephen Kosempel, 2005. "Capital Mobility in an Open Economy Model with Embodied Productivity Growth," Working Papers 0506, University of Guelph, Department of Economics and Finance.
  • Handle: RePEc:gue:guelph:2005-6
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    File URL: http://www.uoguelph.ca/economics/repec/workingpapers/2005/2005-06.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    Convergence; Capital Mobility; Embodied Technological Change;

    JEL classification:

    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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