Growing Through Cycles in an Infinitely -lived Agent Economy
This paper develops an infinitely-lived representative agent economy, in which the relative contribution of the two engines of growth, investment and innovation, changes endogenously over time. The balanced growth path of the economy loses its stability when its endogenously determined growth rate is not sufficiently high, and the economy fluctuates, perpetually moving back and forth between two phases. In one phase, there is no innovation and the market structure is competitive, and the economy grows solely by capital accumulation, as in a neoclassical model. In the other phase, new goods are introduced and the market structure is monopolistic, as in a neo-Schumpetarian model. In the long run, both investment and innovation grow at the same rate, but the economy alternates between the periods of high investment and the periods of higher innovation.
|Date of creation:||Dec 1999|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://www.kellogg.northwestern.edu/research/math/
More information through EDIRC
|Order Information:|| Email: |
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Matsuyama, Kiminori, 1996.
"Growing Through Cycles,"
40, Institute for Advanced Studies.
- Romer, Paul M, 1987. "Growth Based on Increasing Returns Due to Specialization," American Economic Review, American Economic Association, vol. 77(2), pages 56-62, May.
When requesting a correction, please mention this item's handle: RePEc:nwu:cmsems:1280. 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: (Fran Walker)
If references are entirely missing, you can add them using this form.