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Cyclically Balanced Growth Paths in a Model of Economic Growth with Endogenous Policy Switching

Author

Listed:
  • Andrei S. Akhremenko

    () (National Research University Higher School of Economics)

  • Alexander P. Petrov

    () (National Research University Higher School of Economics)

  • Egor A. Yureskul

    () (National Research University Higher School of Economics)

Abstract

This paper deals with a model of economic growth, which we expand to include endogenous policy switching based on retrospective voting. It is shown that under certain conditions the solution has a special form that we call a cyclically balanced growth path. This type of solution is an analogue to balanced growth paths, which often occur in growth models with constant policies. Cyclically balanced growth paths are investigated analytically, and the growth rate over the cycle has been found. Results of numerical experiments are also provided and possible empirical applications of the model are outlined

Suggested Citation

  • Andrei S. Akhremenko & Alexander P. Petrov & Egor A. Yureskul, 2015. "Cyclically Balanced Growth Paths in a Model of Economic Growth with Endogenous Policy Switching," HSE Working papers WP BRP 109/EC/2015, National Research University Higher School of Economics.
  • Handle: RePEc:hig:wpaper:109/ec/2015
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    More about this item

    Keywords

    differential equations; dynamical model; policy space; democracy; autocracy; economic growth; efficiency; public capital; growth path; retrospective voting;

    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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