Questions tagged [economic-growth]
An increase over time in the quantity of goods and services produced within an economy.
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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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0answers
30 views
Lagrangian with no-ponzi condition [closed]
I struggle to write and solve Lagrangian in the Ramsey model.
I have the following individual preferences with a budget constraint:
and an additional constraint that is a no-ponzi condition:
How to ...
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1answer
48 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?
2
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1answer
31 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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1answer
46 views
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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1answer
71 views
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
33 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
78 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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0answers
24 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.
...
2
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1answer
56 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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1answer
45 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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2answers
197 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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1answer
106 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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2answers
72 views
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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1answer
92 views
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 ...
2
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1answer
54 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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10 views
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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1answer
31 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 ...
2
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1answer
72 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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0answers
70 views
Solow model - max steady state output per worker vs max steady state consumption per worker
$$Y=K^{1/3}G^{2/9}(AL)^{4/9}\\\frac{\dot{A}}{A}=\frac{\dot{L}}{L}=0.01\\\dot{G}=tY-0.03G\\\dot{K}=0.2(1-t)Y-0.03K$$
So far, we have a system that shows a basic Solow model with public and private ...
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0answers
61 views
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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1answer
40 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 $k/k$
$$ \dot{y} =f’(k) \frac{\dot{...
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1answer
409 views
Why is South Korea classified as an Emerging Market economy?
I have recently found out that South Korea is part of the MSCI Emerging Markets Index, and that the South Korean Won (KRW) currency trades as a non-deliverable currency. Furthermore, the South Korean ...
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1answer
29 views
Formalizing unorganized Sector
This is a fairly basic question. What are the real benefits of formalizing the unorganized sector? What does integrating these into the organized sector achieve other than maybe increased tax revenue ...
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0answers
42 views
How do I work with the growth accounting framework in a regression?
I am currently writing my master's thesis with the topic "The impact of digitalization on economic growth in China and Germany".
My idea is to take a technology such as Industry 4.0, IoT or ...
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1answer
173 views
Derivation of Surplus in Paul Romer's paper on "mathiness"
In this paper by P. Romer https://pubs.aeaweb.org/doi/pdfplus/10.1257/aer.p20151066
I'm wondering the Surplus $S$ was derived.
By using the given condition I found that $$q_0=m^{-\tfrac{1}{a+b}}N^{-\...
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0answers
14 views
Regression based on the Solow Model
If we have the following regression based on the Solow model:
log(yi) = β0 + β1 * log(si) + β2 * log(ni + gi + δi ) + ei
And we know that based on:
y* = 〖(s/(n + δ + g))〗^(α/(1-α))
log(y*) = α/(1-α) * ...
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1answer
40 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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1answer
45 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
40 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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1answer
27 views
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 ...
2
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1answer
105 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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1answer
75 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 ...
3
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1answer
154 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, ...
0
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1answer
55 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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6answers
695 views
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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2answers
2k views
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 ...
2
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1answer
55 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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3answers
58 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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0answers
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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1answer
93 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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1answer
26 views
Are business cycle fluctuations usually studied in a (New Keynesian) DSGE model, or can they also be studied in a growth model?
I wonder if business cycle fluctuations are usually studied in a (New Keynesian) DSGE model, or can they also be studied in a growth model?
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1answer
46 views
How to determine a corner solution? Growth Model
I'm working on a paper called "Fertility clubs and economic growth" of Ahituv and MOav (linked below) and arrived at this point:
The paper shows three optimal conditions respect to ...
2
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1answer
43 views
AR(1) in Discrete Version of Stochastic Growth Model
If I assume a stochastic growth model in discrete time and the production function is defined as $F(K_{t}(s^{t-1}), L_{t}(z^{t}))$ where $z^{t}$ is history of the technological shock up to time $t$. A ...
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1answer
28 views
Calculating Per Capita
This is in reference to https://fred.stlouisfed.org/series/M2
My question is how can i calculate the M2 value on per capita basis? Do i just divide it with the population by year?
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0answers
22 views
Is there contradiction between ''job creation" and "growth" as implemented by automation?
Joint goals of job creation and sustainable growth are the main goals of majority of EU funding schemes. E.g. European Innovation Institute explicitly states in its mission https://eit.europa.eu/who-...
3
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1answer
136 views
Neutral technical progress
Recently I learnt that Cobb-Douglas production function has elasticity of substitution equal to 1, therefore it has neutral technical progress. Then Leontief production function has zero elasticity of ...
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1answer
23 views
Theory behind financial flows not going to the most developing nations even though they have the highest growth rates
I remember reading a bunch of articles on this a few years ago, but I can't find any of the references any more.
It has been a while since I looked at this, so here is a rough paraphrase of the ...
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1answer
48 views
Does Direct Benefit Transfers make an economy poorer?
Printing money and giving to the poor causes inflation.
Increases demand and hikes prices. This is basically certain.
But on the contrary, a paper titled Debunking the Stereotype of the Lazy Welfare ...
