Questions tagged [economic-growth]

An increase over time in the quantity of goods and services produced within an economy.

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28 views

Solow Model vs. Ramsey Model [closed]

I am a little confused. Our professor gave us the task of working out the similarities and differences between the Solow Model and Ramsey Model (both without technological progress) and which model ...
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Growth Premium and Debt consolidation

I'm interested in country cases (e.g., Argentina or another EME) where there have been periods of high economic growth but worsening (or at least not improving) fiscal balances. This could be either ...
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Issue with Calculating Revenue Compound Monthly Growth Rate (CMGR)

I am trying to calculate the revenue compound monthly growth rate (CMGR) over a 12 month period of a hypothetical business whose net revenue shares a seasonality trend. Here is an example of data (...
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Recent Research Topics in Macroeconomics (Hopefully Growth Theory)

Im in my last year as undergraduate and i have the opportunity to make a tesis, i have strong foundations in econometrics and macroeconomics but I don't know what the latest research on macroeconomics ...
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Comparison between stochastic and deterministic growth models

According to the paper "On Stochastic Models of Economic Growth" by Assaf Razin and Joseph A. Yahav, stochastic models might be more suitable because a steady state never actually exists in ...
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Proof of Saddle-Path Stablility in Ramsey-Cass-Koopmans model

I'm currently struggling to proof the saddle-path stability in the Ramsey-Cass-Koopmans model. Based on the books Introduction to Modern Economic Growth by D. Acemoglu (chapter 7 and 8) and ...
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Natural regression to study rate of convergence from MRW (1992)

In the paper of Mankiw, Romer and Weil (1992: 422-423) aka MRW there is a transfer from theoretical dynamical model to empirical regression approach as follows. The model suggest a natural regression ...
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Reason behind unequal productivities of investment in different sectors, in the Feldman-Mahalanobis model?

In the model, production is divided into two sectors: the consumer goods sector and the capital goods sector. It is assumed that ratio of 'increment of income to the increment in investment in ...
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35 views

Showing Growth rates are equal in BGP?

One feature of Balanced Growth Path is that growth rates are equal along it: Consider the following conditions: $y_t= Xk_t$ $y_t = c_t + i_t$ $k_{t+1} = (1-\delta)k_t$ From first equation it is easy ...
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Brexit impact data and forecasts

I am looking for some new studies (preferable from 2021) about the medium/long term impacts of Brexit, especially accounting for the TCA agreement. I know there are many papers about these topic, but ...
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63 views

Comparative statics of the Ramsey model, the effect of a change in population growth on the steady state capital-labor ratio

In Acemoglu's book "Introduction to Modern Economic Growth" there is Proposition 8.3 which states that the impact of a change in the population growth rate on the steady state capital-labour ...
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41 views

Help to understand a Log-linearization and subsequent Differentiation with respect to time

I was reading the following paper: https://www.jstor.org/stable/2999442?seq=1#metadata_info_tab_contents At one point there are a couple of simple passages that however I did not fully understand. In ...
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Can economic models predict China overtaking the United States?

I recently read an article about China's economic progress: Chinese economy to overtake US 'by 2028' due to Covid Can models and simulations based on economic data predict when China's economy will ...
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58 views

Derivation of Solow Growth Model (Solow, 1956)

In Solow's "A Contribution to the Theory of Economic Growth" paper, how do we go from this equation to such that Could you please give me a hint about that derivation?
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35 views

Solow model response function

Consider a Solow model without technological progress so that the steady state $k^*$ occurs at $sf(k^*) = (n+\delta)k^*$ where $n$ is population growth rate, $\delta$ is capital depreciation rate and $...
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How to draw a diagram like Solow model to prove growth rate in Harrod-Domar model won't converge?

Solow model defines income per capita function f(k)=F(K/L,1) with f'(k)>0 and f''(k)<0 and proves that there must be an intersection with (gL+gA+δ)k where growth rate converges. But it confuses ...
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Why isn't economic growth defined in terms of the increase in national wealth?

Economic growth is defined as the increase in production or output per unit time. Why isn't it instead defined in terms of the increase in national wealth?
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Inada Conditions for Intensive Form of Production Function

I want to show that the Inada conditions $\underset{K\rightarrow0}{\lim} \frac{\partial F}{\partial K}=\underset{L\rightarrow0}{\lim} \frac{\partial F}{\partial L}=\infty$ and $\underset{K\rightarrow\...
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1answer
37 views

Economic growth in a DSGE model, despite mean-zero shocks

The DSGEs I've seen have steady-states, and mean-zero shocks. Can these predict growth in GDP / capital etc? Is this possible despite them being equilibrium models, or do you have to completely change ...
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1answer
201 views

Constant returns to scale and diminishing marginal returns in the Solow model

My introduction to economics course had a section on the Solow model which I'm revising for next year. I'm a little confused by two of the assumptions which our lectuer taught us are made by the Solow ...
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25 views

Idea Production Function References

I've read in growth theory about the Idea production function: $\dot{A}=f(A,S)$ which states that the change in ideas or blueprints or patents is a function of past ideas and the number of scientists. ...
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71 views

Is there an economic argument against mass immigration?

(I know little about economics, so I'd appreciate an elementary explanation) Background for this question is that I was wondering what makes people say China's economy will keep growing while its ...
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64 views

Why does HDI use log-transformed data for income index?

For calculation of HDI, the Income Index used is $\mathrm{I_{income} = \dfrac{ln(Income) - ln(min Income)}{ln(max Income) - ln(min Income)}}$. Why is the log transformed income used here? World Bank ...
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202 views

Does investing in the stock market contribute to economic growth?

I am morally opposed to economic growth: I think that for the good of our planet we need to be shrinking human impact in pretty much every way, not increasing it. If I invest in the stock market, I ...
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107 views

Will economic discrepancy between democratic and authoritarian states decrease over time? [closed]

The most popular explanation for the economic discrepancy between different states is that in the authoritarian states the leaders need corrupt extractive institution to preserve their power. However, ...
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How should I regress income inequality on economic growth?

I would like to know which variables to use to regress income inequality on economic growth. For income inequality, I am thinking of using the Gini index, but don't know what measurement exactly. For ...
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How to get this Production Function in Growth Rates

I'm struggling to understand how Khan & Reinhart (1990) go from the next production function. $$y=A f(K,L,Z)$$ Where $y$ is the production of the economy, $A$ is a variable which contains the ...
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1answer
59 views

Human Capital Vs TFP

I'm interested in familiarizing myself with some of the intra-debates that have occurred over the years, having to do with Mankiw, Romer, Weil (1992) and Klenow, Rodriguez-Clare (1997). Some argue ...
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Help to find China Data

do you know where can I find data about the R&D expenditure of china from 1976 until 2020?
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33 views

Is GDP the market value of goods consumed or goods produced in a time period?

Definitions across various resources state that GDP is the market vaue of all goods 'produced' in a certain time period. But while calculating GDP by expenditure method, consumers' spending is one of ...
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95 views

Measuring growth rate when values are negative

I am studying nightlights data and trying to model cross-sectional convergence in nightlights in India. However data has some stray light corrections, which has made some of the measurements below ...
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Neoclassical Two-Sector Model of Endogenous Growth: Getting the consumption growth rate

I'm struggling to derive the growth of consumption from a two-sector model with the traditional Cobb-Douglas function. The model I am speaking about incorporates the fractions used by physical and ...
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47 views

Transitional Dynamics of consumption per capita in solow model

I can write the transitional dynamics of output per capita as follows $$y=f(k)$$ Take its derivative with respect to time t $$ \dot{y} =f’(k) \dot{k}$$ Divide it by $k/k$ $$ \dot{y} =f’(k) \frac{\dot{...
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508 views

Why is South Korea classified as an Emerging Market economy?

I have recently found out that South Korea is part of the MSCI Emerging Markets Index, and that the South Korean Won (KRW) currency trades as a non-deliverable currency. Furthermore, the South Korean ...
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29 views

Formalizing unorganized Sector

This is a fairly basic question. What are the real benefits of formalizing the unorganized sector? What does integrating these into the organized sector achieve other than maybe increased tax revenue ...
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178 views

Derivation of Surplus in Paul Romer's paper on "mathiness"

In this paper by P. Romer https://pubs.aeaweb.org/doi/pdfplus/10.1257/aer.p20151066 I'm wondering the Surplus $S$ was derived. By using the given condition I found that $$q_0=m^{-\tfrac{1}{a+b}}N^{-\...
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44 views

Is this a total derivative - if yes, why minus

This is the beginning of the derivation of equation of motion from the Solow model (Romer, 2019): My question is: is this the total derivative (w.r.t. ultimate source of change "t")? If yes,...
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46 views

What was the cause of the decline in remittances sent to Pakistan between 1982 and 2000?

I am trying to find out what caused the 2-decade long decline in remittances as a % of GDP. I have spent an hour trying to search for explanations but haven't found anything. I know its a long shoot ...
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1answer
43 views

How can the GDP's growth rate be positive, when the GDP decreases?

I have question about following charts in Mozambique. Here is GDP of Mozambique in 2010-2016 - https://data.worldbank.org/indicator/NY.GDP.MKTP.CD?end=2019&locations=MZ&start=2008. You can ...
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Resolution - Ramsey growth model with per capita variables

Let's say that we have the sum of the utility of a social planner $$\int_{0}^{\infty}U\left(C\right)e^{-\rho t}dt$$ where $C$ is the total consumption. If we want to write this by a per capita ...
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1answer
110 views

If protectionist policies hinder economic growth, why do we need border taxes at all?

I understand that free movement of labour and goods are a net positive for economic growth, and protectionist policies, which would make exports and imports harder would not be. But if this is the ...
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85 views

What would happen in a modern economy if growth plateaus?

According to a Wikipedia article on a United Nations report, The UN Population Division report of 2019 projects world population to continue growing, although at a steadily decreasing rate, and to ...
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176 views

Empirical justification for a constant-returns-to-scale production function in the Solow model

I am currently learning the Solow model of growth, where a constant returns to scale production function for the economy is assumed. I realise that the assumption makes further analysis much simpler, ...
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57 views

Why doesn't stock market help to boost the economic growth directly?

For example, during the recession, the central bank often goes to buy financial instruments that are riskier than government bonds (such as corporate bonds)- which is called "quantitative easing&...
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How can the stock market keep growing indefinitely?

It sounds like a dumb question, but there is only so much money in the world. Assets can grow, but money can only be printed. So if there is 400 trillion dollars worth of money in the world, and the ...
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Is investment in real estate a real investment?

In the book The Financial Crisis and the Free Market Cure in chapter 3 author said that investment in real estate is not really investment. It is jobs that create ...
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60 views

Models with Learning by Doing and Knowledge Spillovers - Barro, Sala-i-Martin (2003)

Consider the model of endogenous growth with learning by doing and knowledge spillovers presented in Barro & Sala-i-Martin (2003), chapter 4, section 4.3, starting in page 212. In equilibrium, the ...
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63 views

Theoretical economy calculation of closed country

Is there any well-known theoretical solution to the problem as described below? I am considering an ideal very simplified case. There is a closed country/community of N people. All people are working. ...
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29 views

When is the upward economic convergence in the EU estimated to happen?

Although the regional cohesion, i. e. the socio-economical convergence of the East and the West has been one of the EU's main goals, some economists seem to dispute there's any evidence for them being ...
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108 views

Why, theoretically, is economic growth exponential? [closed]

Despite the experimentally well-observed exponential nature of GDP growth, I've never actually seen a theoretical reason or "prediction" why it should be so. (Even if the answer is "...

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