On the stability of endogenous growth models: an evaluation of the agents’ response to output fluctuations
This paper presents three modified versions of the simple AK endogenous growth model. Such frameworks stress the role of consumers’ sentiment, the impact of fiscal policy and the effect of non-optimal investment decisions made by firms. In all the cases, today’s decisions take into consideration the economic performance of the previous period; in the first case, households react pro-cyclically to the output path; in the second case, a counter-cyclical fiscal policy is considered; and in the third case, firms adopt a pro-cyclical behaviour concerning investment choices. We study the stability properties of the three models and conclude that, on each one of them, a saddle-path stable equilibrium exists.
|Date of creation:||Apr 2007|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://mpra.ub.uni-muenchen.de
More information through EDIRC
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.:
- Guo, Jang-Ting & Lansing, Kevin J., 2002.
"Fiscal Policy, Increasing Returns, And Endogenous Fluctuations,"
Cambridge University Press, vol. 6(05), pages 633-664, November.
- Jang-Ting Guo & Kevin Lansing, 1999. "Fiscal policy, increasing returns, and endogenous fluctuations," Working Papers in Applied Economic Theory 99-08, Federal Reserve Bank of San Francisco.
- Alberto Alesina & Filipe R. Campante & Guido Tabellini, 2008.
"Why is Fiscal Policy Often Procyclical?,"
Journal of the European Economic Association,
MIT Press, vol. 6(5), pages 1006-1036, 09.
- Alberto Alesina & Guido Tabellini, 2005. "Why Is Fiscal Policy Often Procyclical?," Working Papers 297, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
- Alberto Alesina & Guido Tabellini, 2005. "Why is fiscal policy often procyclical?," Levine's Bibliography 784828000000000465, UCLA Department of Economics.
- Alberto Alesina & Guido Tabellini, 2005. "Why is Fiscal Policy often Procyclical?," CESifo Working Paper Series 1556, CESifo Group Munich.
- Alberto Alesina & Guido Tabellini, 2005. "Why is Fiscal Policy Often Procyclical?," NBER Working Papers 11600, National Bureau of Economic Research, Inc.
- Alberto Alesina & Guido Tabellini, 2005. "Why is fiscal policy often procyclical?," Harvard Institute of Economic Research Working Papers 2090, Harvard - Institute of Economic Research.
- Martin, Philippe & Rogers, Carol Ann, 1995.
"Stabilization Policy, Learning by Doing, and Economic Growth,"
CEPR Discussion Papers
1130, C.E.P.R. Discussion Papers.
- Martin, Philippe & Rogers, Carol Ann, 1997. "Stabilization Policy, Learning-by-Doing, and Economic Growth," Oxford Economic Papers, Oxford University Press, vol. 49(2), pages 152-66, April.
- Souleles, Nicholas S, 2004. "Expectations, Heterogeneous Forecast Errors, and Consumption: Micro Evidence from the Michigan Consumer Sentiment Surveys," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 36(1), pages 39-72, February.
- Bergman, U. Michael & Bordo, Michael D. & Jonung, Lars, 1998.
"Historical Evidence on Business Cycles: The International Experience,"
SSE/EFI Working Paper Series in Economics and Finance
255, Stockholm School of Economics.
- U. Michael Bergman & Michael D. Bordo & Lars Jonung, 1998. "Historical evidence on business cycles: the international experience," Conference Series ; [Proceedings], Federal Reserve Bank of Boston, vol. 42(Jun), pages 65-119.
- Bob McNabb & Karl Taylor, 2002.
"Business Cycles and the Role of Confidence: Evidence from Europe,"
Discussion Papers in Economics
02/3, Department of Economics, University of Leicester.
- Karl Taylor & Robert McNabb, 2007. "Business Cycles and the Role of Confidence: Evidence for Europe," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 69(2), pages 185-208, 04.
- Galí, Jordi & Perotti, Roberto, 2003.
"Fiscal Policy and Monetary Integration in Europe,"
CEPR Discussion Papers
3933, C.E.P.R. Discussion Papers.
- Karsten Staehr, 2007.
"Fiscal Policies and Business Cycles in an Enlarged Euro Area,"
CESifo Working Paper Series
1933, CESifo Group Munich.
- Staehr, Karsten, 2008. "Fiscal policies and business cycles in an enlarged euro area," Economic Systems, Elsevier, vol. 32(1), pages 46-69, March.
- Karsten Staehr, 2007. "Fiscal policies and business cycles in an enlarged euro area," Bank of Estonia Working Papers 2007-03, Bank of Estonia, revised 08 Mar 2007.
- Jason Bram & Sydney Ludvigson, 1997.
"Does consumer confidence forecast household expenditure?: A sentiment index horse race,"
9708, Federal Reserve Bank of New York.
- Jason Bram & Sydney Ludvigson, 1998. "Does consumer confidence forecast household expenditure? a sentiment index horse race," Economic Policy Review, Federal Reserve Bank of New York, issue Jun, pages 59-78.
- Mackiewicz, Michał, 2008. "Determinants of Cyclicality of Fiscal Surpluses in The OECD Countries," MPRA Paper 16034, University Library of Munich, Germany.
- Khoon Lek Goh, 2003. "Does Consumer Confidence Forecast Consumption Expenditure in New Zealand?," Treasury Working Paper Series 03/22, New Zealand Treasury.
- Afonso, António & Nickel, Christiane & Rother, Philipp, 2005.
"Fiscal consolidations in the Central and Eastern European countries,"
Working Paper Series
0473, European Central Bank.
- António Afonso & Christiane Nickel & Philipp C. Rother, 2006. "Fiscal Consolidations in the Central and Eastern European Countries," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 142(2), pages 402-421, July.
- António Afonso & Christiane Nickel & Philipp Rother, 2005. "Fiscal Consolidations in the Central and Eastern European Countries," Working Papers Department of Economics 2005/03, ISEG - School of Economics and Management, Department of Economics, University of Lisbon.
- Eckhard Hein & Achim Truger, 2007.
"Monetary Policy, Macroeconomic Policy Mix and Economic Performance in the Euro Area,"
in: Money, Distribution and Economic Policy, chapter 11
- Eckhard Hein & Achim Truger, 2006. "Monetary policy, macroeconomic policy mix and economic performance in the Euro area," IMK Working Paper 06-2006, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.
- Backus, David K & Kehoe, Patrick J, 1992.
"International Evidence of the Historical Properties of Business Cycles,"
American Economic Review,
American Economic Association, vol. 82(4), pages 864-88, September.
- David K. Backus & Patrick J. Kehoe, 1992. "International Evidence on the Historical Properties of Business Cycles," Working Papers 92-5, New York University, Leonard N. Stern School of Business, Department of Economics.
- David K. Backus & Patrick J. Kehoe, 1991. "International evidence on the historical properties of business cycles," Staff Report 145, Federal Reserve Bank of Minneapolis.
- Dion, David Pascal, 2006. "Does Consumer Confidence Forecast Household Spending?," MPRA Paper 902, University Library of Munich, Germany.
- Dion, David Pascal, 2006. "Does Consumer Confidence Forecast Household Spending? The Euro Area Case," MPRA Paper 911, University Library of Munich, Germany.
- David B. Gordon & Eric M. Leeper, 2005. "Are Countercyclical Fiscal Policies Counterproductive?," NBER Working Papers 11869, National Bureau of Economic Research, Inc.
- Rebelo, Sergio, 1991.
"Long-Run Policy Analysis and Long-Run Growth,"
Journal of Political Economy,
University of Chicago Press, vol. 99(3), pages 500-521, June.
- repec:cup:macdyn:v:6:y:2002:i:5:p:633-64 is not listed on IDEAS
- Giovanni Dosi & Giorgio Fagiolo & Andrea Roventini, 2006. "An Evolutionary Model of Endogenous Business Cycles," Computational Economics, Society for Computational Economics, vol. 27(1), pages 3-34, February.
- Mark Doms & Norman Morin, 2004. "Consumer sentiment, the economy, and the news media," Finance and Economics Discussion Series 2004-51, Board of Governors of the Federal Reserve System (U.S.).
- Budina, Nina & van Wijnbergen, Sweder, 1997. "Fiscal Policies in Eastern Europe," Oxford Review of Economic Policy, Oxford University Press, vol. 13(2), pages 47-64, Summer.
- Perry, Guillermo, 2003. "Can fiscal rules help reduce macroeconomic volatility in the Latin America and Caribbean Region?," Policy Research Working Paper Series 3080, The World Bank.
When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:2891. 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: (Ekkehart Schlicht)
If references are entirely missing, you can add them using this form.