IDEAS home Printed from https://ideas.repec.org/p/ihs/ihsesp/7.html
   My bibliography  Save this paper

Application of Projection Method in a Model of Endogenous Growth

Author

Listed:
  • Kejak, Michal

    (Center for Economic Research and Graduate Education - Economics Institute and Charles University and Academy of Science of the Czech Republic)

Abstract

The main goal of the paper is to show the application of the projection method as a tool for the analysis of transitional dynamics of endogenous growth models, the analysis which is very often omitted in common literature on the topic. The application of the method is demonstrated on an endogenous growth model with human capital accumulation and government sector. We analyze the long-run (steady states) and the short-run effects (transitional dynamics) of different fiscal policies. The transitional dynamics of the competitive equilibrium and the social optimum economies are compared. It is shown that when the economy starts with relatively abundant physical capital it is optimal to decrease its level very rapidly even at the cost of a big decline of consumption for a period of time. The introduction of education subsidies can bring the economy closer to the optimum and, therefore, improve the welfare of the society.

Suggested Citation

  • Kejak, Michal, 1995. "Application of Projection Method in a Model of Endogenous Growth," Economics Series 7, Institute for Advanced Studies.
  • Handle: RePEc:ihs:ihsesp:7
    as

    Download full text from publisher

    File URL: http://www.ihs.ac.at/publications/eco/es-7.pdf
    File Function: First version, 1995
    Download Restriction: no

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Kejak, Michal, 2003. "Stages of growth in economic development," Journal of Economic Dynamics and Control, Elsevier, vol. 27(5), pages 771-800, March.

    More about this item

    JEL classification:

    • C6 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ihs:ihsesp:7. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Doris Szoncsitz). General contact details of provider: http://edirc.repec.org/data/deihsat.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.