Questions tagged [economic-growth]
An increase over time in the quantity of goods and services produced within an economy.
445
questions
5
votes
0
answers
148
views
Lucas Model 1988, deriving the elasticity
I'm currently reading one of the most cited papers in Economics, On the Mechanics of Economic Development by Robert Lucas Jr. (1988), published in the Journal of Monetary Economics.
The technology for ...
- 428
0
votes
0
answers
23
views
Dollar Cycle & Growth of Developing countries
Several studies have shown that a dollar appreciation cycle is negatively correlated with the real GDP growth rate in emerging economies, while it is positively correlated with a dollar depreciation ...
- 101
1
vote
1
answer
32
views
How does inflation impact long-term economic growth?
I’ve been studying economic growth models and am curious about the role of inflation. I understand that moderate inflation is often considered normal in a growing economy,
Are there any models or ...
- 11
5
votes
0
answers
80
views
Utility function and Balanced Growth
I'm reading the article published by Acemoglu and Restrepo (AER,2018). They propose a growth model where the demand side of the economy is represented by the following utility function:
\begin{...
- 428
1
vote
1
answer
105
views
Derivation in Robert Solow's "A Contribution to the Theory of Economic Growth"
I am attempting to go through the derivations in Robert Solow's 1956 paper 'A Contribution to the Theory of Economic Growth'. On pages 73 to 76 he goes through an example where the production function ...
- 13
0
votes
0
answers
35
views
Data for Augmented solow growth model
I am writing my bachelor thesis currently on the growth determinants of Central and Eastern European nations in the 21st century. In it, want to look at how the neoclassical/Solow growth model fits ...
0
votes
1
answer
28
views
Infinite derivative at zero bundle
I'm a first year grad student and something we've been using to ensure a maximization problem doesn't admit $0 \in \mathbb R^d$ as a solution is that the derivative (gradient) of the production/...
- 3
0
votes
0
answers
22
views
is there any specific way to convert a country's gdp to us dollars?
I need to convert Indonesia's real/constant GDP(rupiah) base year 2010 to USD. is it like basic convert using exchange rate based on the year I look for? or is there other way?
I am concerned with the ...
1
vote
2
answers
156
views
Is there a formalization of the 'broken windows fallacy' that discriminates wasteful economic activity from useful?
If I pay someone €100 to dig a hole, and they pay me €100 to fill it back up, GDP will (seemingly) grow by €200, making this seem good for the economy.
"Aha!" says the economist, "that'...
- 111
1
vote
1
answer
62
views
Derivation of the Ideal Price Index
I'm studying Chapter 15 of Acemoglu's growth book, which is about skill-biased technological change.
The unique final good is produced in perfect competition by combining the output of the two ...
- 428
0
votes
0
answers
47
views
Origin of terms Harrod neutral, Solow neutral and Hicks neutral
I just looked for the same question on the exchange but I didn't find anything, I even tried to look for the answer on Google but it seems it's not present. Could someone give me the origin of these ...
- 93
4
votes
1
answer
382
views
Social Planner vs Representative Household
Is there any difference between solving the social planner's problem or the representative household's in the Ramsey-Cass-Koopmans model?
The social planner chooses a plan $\left\{c_t, l_t, k_{t+1}\...
- 327
0
votes
0
answers
28
views
Why does Argentina GDP per capita relatively declined in the last 100 years?
I would like to know if there is an academically well accepted theory on this question.
I know 3 'hand-waving' explanations:
It was rich in the past indeed, but with a small population. It was a kind ...
1
vote
1
answer
86
views
Why is economic rent not seen as a market failure?
Economic rent seems to be behind rising inequality and stagnating growth (Stiglitz, 2016) arguing that a wealth residual explaining both declining capital and labour shares in national income is ...
- 244
2
votes
0
answers
12
views
What are some papers on cyclical poverty trap?
I am interested in the poverty trap models. Dynamically speaking, the model must exhibit multiple equilibria, as described in the below figure. (source)
I have seen many models that can formulate the ...
- 191
0
votes
1
answer
65
views
What would happen if we had decreasing returns to scale in the solow-swan growth model? Would there still be a steady state and perfect competition?
I understand with IRS we have explosive growth and a single firm would eventually dominate the market since MC < AC, and hence P < AC, so firms would leave the market. I am struggling to find ...
4
votes
0
answers
64
views
Ramsey model and the steady state
Following Barro's book about the Ramsey Model, when we work with variables expressed in units per effective labor we end up with the following system of 2 differential equations
\begin{equation}
\frac{...
- 428
4
votes
0
answers
43
views
Labor augmenting technological progess and its relevance
Can you provide a proof showing why balanced growth requires technological change to be labor-augmenting in the neoclassical growth model?
- 319
1
vote
1
answer
67
views
Derivation from Solow-type neoclassical growth equation?
In Chapter 6 of the 12th edition of "Economic Development" by Michael P. Todaro & Stephen C. Smith, an equation is introduced to illustrate the consequences of rapid population growth, ...
2
votes
0
answers
147
views
Global Asymptotic Stability in the Solow Model - Rigorous proof
Consider the (simplified) Solow equation, which is a first-order non-linear difference equation:
\begin{equation}
k_{t+1} = sf(k_t) + (1-\delta)k_t
\end{equation}
where $s$ and $\delta$ are two ...
- 428
1
vote
0
answers
33
views
Data on average annual hours worked by persons engaged
In Penn World Table 10.0 (source: https://www.rug.nl/ggdc/productivity/pwt/pwt-releases/pwt100), the avh (average annual hours worked by persons engaged) figures are missing for many countries.
Where ...
- 121
0
votes
1
answer
45
views
How can I replicate the Kaldor facts?
I have just started to do economic research and I was asked to replicate the Kaldor stylized facts. But I've encountered some problems; specifically, I don't know how I can find such data:
For the ...
- 413
3
votes
1
answer
115
views
Marginal and Average Cost in the Romer Model of Endogenous Growth
On page 124 of David Romer's Advanced Macroeconomics (5th Ed), he mentioned that for the Romer model,
Because firms producing final output face constant costs for each input and the production ...
- 45
0
votes
1
answer
66
views
Question regarding math rules for fractions and exponents when isolating variables of interest
I'm working with growth models in a course, and keep stumbling into this when trying to isolate variables of interest.
I have a formula $y^*=AL^{\alpha-1}$ and I want to isolate $L$ in this expression....
- 1
3
votes
1
answer
113
views
From the Transversality Condition to Initial Consumption
Suppose we have a discrete time neoclassical growth model with CRRA utility where we solve $$\max_{\{c,k\}_{t=0}^{\infty}} \sum_{t=0}^{\infty}\beta^t \frac{c_t^{1-\sigma}-1}{1-\sigma}$$ $$\text{st. } \...
- 827
1
vote
1
answer
96
views
Diagnostic tests on models using panel data
I am trying to replicate Islam(1995) Convergence model for EU countries. I know that LSDV estimator is biased,however i have applied it in order to compare the results with other methods. My question ...
- 59
0
votes
0
answers
56
views
Lucas paper (1988)
I read the Lucas paper https://papers.ssrn.com/sol3/papers.cfm?abstract_id=227120
I don't get the equations 35-36 on change in terms of trade due to change in endowments. Can anyone explain?
- 36
1
vote
1
answer
110
views
How to solve dynamic problem with 2 production functions?
Suppose we have the following problem:
$\max \int_0^\infty \exp(-\rho t) u(c(t))dt$
where $c(t)$ is consumption at time $t$. Subject to:
$\dot{k}(t)= f(k(t))- c(t) - \delta k(t)$.
where $k$ is capital,...
- 1,914
1
vote
1
answer
205
views
Conditional Convergence
Lets assume that we have a theoretical model in this specification to test conditional convergence:
\begin{equation}
\frac{1}{T} \ln\left(\frac{y_{it}}{y_{it-1}}\right) = a - (1 - e^{-\beta T})\ln(y_{...
- 59
1
vote
0
answers
80
views
Controlling for Log population with Log GDP per Capita outcome in OLS
Bartlett and Partnoy (BP) (2020) show that OLS with natural log dependent variables that are ratios must include the ln(denominator) on the RHS or they must assume that the numerator and denominator ...
- 111
1
vote
2
answers
321
views
Absolute Convergence
I have noticed that some researchers in order to test convergence hypothesis apply a model in this form:
$(1/T) \ln(y_{it}/y_{i,t-1}) = b_0 - b_1\ln(y_{i,t-1}) + u_{it} $
(Barro & Sala-I-Martin, ...
- 59
0
votes
0
answers
46
views
If Milei is able to apply his economic plan during the next decade, what are the chances of Argentina becoming (once again) a major economy?
Once Argentina was one of the strongest economies in South America. It is pretty clear that the economic model that made Argentina successful then does not stand a big chance to work again. Javier ...
- 101
0
votes
0
answers
41
views
non-ponzi condition
What Is The Differences Between R(T) And R(S) In No-Ponzi Condition In Ramsey Growth Model?
- 131
0
votes
0
answers
30
views
Ramsey no ponzi condition
Please help me understand how to create these functions, sometime they use "t" denote, sometime use "r" denote that make me feel confuse. Function (17) and from (19) to (23)
- 131
0
votes
1
answer
79
views
Ramsey model problem
Explain the no-Ponzi game condition throughout the function.
Does the constrain function: also reflect include the No-Ponzi condition?
- 131
1
vote
1
answer
74
views
How the saving rates were derived in Azariadis (1996)'s Impatience Trap?
The household maximizes his lifetime utility function according to
$$
\max_{c_1, c_2} v(c_1, c_2) := \frac{1}{\beta(c_1)} \log c_1 + \log c_2 - A(c_1, c_2)
$$
subject to
$$
\beta(c_1) = \begin{cases}
...
- 191
0
votes
0
answers
40
views
Help with Solow model
I need help with the following question, I would really appreciate any help. For the general case of any production function, the differential equation for k(superscript dot) looked as follows: k(...
- 1
0
votes
0
answers
39
views
Do developed countries defraud trillions of dollars from developing countries?
According to the Guardian, rich Western countries defraud large amounts of money from poor countries, much more than they give in development aid.
If we add theft through trade in services to the mix,...
- 69
2
votes
2
answers
537
views
In what way do developed countries steal trillions of dollars from developing countries?
According to the Guardian, rich Western countries 'steal' large amounts of money from poor countries, much more than they give in development aid.
If we add theft through trade in services to the mix,...
- 69
1
vote
1
answer
182
views
Ramsey model condition
Why are transversality conditions and no-ponzi game conditions needed in the Ramsey model? And why do we assume that is a CIES utility function?
- 131
2
votes
2
answers
280
views
The Solow growth model
I wonder why at the beginning $sf(k(t))$ is steeper than $\delta k(t)$, but at some point, it starts to become flatter than $\delta k(t)$?
- 131
1
vote
1
answer
52
views
Solow Model in disrectly and continuously
what is the differences between solow model in disrectly time and continuously time?
Why in disrectly time function use the equation: k(t+1)=(1-δ)k(t) + sf(k(t)) and in continuously time function use: ...
- 131
2
votes
2
answers
410
views
CRS assumption in Solow model
Can you explain why does Solow growth model assume "constant returns to scale"?
- 131
2
votes
1
answer
67
views
Literature exploring theoretically the relationship between inequality and economic growth
Specifically, I'd be very grateful if you may refer me to any literature treating wealth or income inequality or both, but the important thing is that it studies the relationship from a theoretical ...
- 943
1
vote
1
answer
53
views
Log of 0 Probelm in Acemoglu et al. 2002b
in Acemoglu et. al. 2002b, which is about European Growth and Atlantic Trade, they do a log transformation of the atlantic trade variable. Since there are many observations where trade is 0, they say ...
- 43
1
vote
0
answers
36
views
Why was the USD rangebound between 1987 and 1995 from an economic standpoint?
I'm trying to understand what caused this long period of range boundedness for the USD index from 1987-1995 from an economic standpoint.
From my understanding. In 1985 the USD had reached it's ...
- 43
0
votes
1
answer
57
views
data on the quarterly and monthly world economic growth
I would be extremely grateful if you could assist me in acquiring access to dependable and current data regarding global economic growth or GDP growth rates, both at the quarterly and monthly levels. ...
- 121
0
votes
0
answers
26
views
Average growth rate estimation
How can we estimate the average growth rate from 2011 to 2022,when with time, the quantity is first increasing at decreasing rate, then decreasing and then again increasing at an increasing rate with ...
- 1
1
vote
2
answers
79
views
Find the salary and interest rate in the $AK$ model
I'm trying to solve this exercise for Macroeconomics III (the course covers long-run growth models).
Find the wage $w_t$ and the interest rate $r_t$ in the $AK$ model, i.e., the production function is
...
- 2,259
2
votes
1
answer
115
views
Present Value of flow of profits with constant interest rate
I'm studying Schumpeterian Models of Quality Ladders from the Barro's book (Ch.7).
I have problems in getting the derivation of equation $(7.13)$ as follows
The basic idea of those models is: when an ...
- 428