Questions tagged [economic-growth]

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

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2answers
105 views

Must a market-based economy constantly expand?

I vaguely recall from my reading of Adam Smith’s “The Wealth of Nations”, during college, that he opined that a market-based economy must constantly expand. Is this recollection correct and, if so, ...
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a question on the endogenous growth model

I have such a question on the endogenous growth mode”: In the macroeconomics literature there are various ways in which the growth process in the Ransey-Cass- Koopmans model has been endogenized. ...
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109 views

Interpretation of the Cross Partials of the Cobb-Douglas

Consider a Cobb-Douglas Prod. Function $$Y=AL^{a}K^{1-\alpha}$$ This has the cross-partial: $$\frac{\partial^2 Y}{\partial K\partial L}=(1-\alpha)\alpha AL^{\alpha-1}K^{-\alpha}$$ Is the ...
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135 views

Sustainable growth in the long run [closed]

Suppose that, in addition to physical capital and labour, an economy requires a fixed factor and a non-renewable resource to produce the final good. Prove that an economy with these input requirements ...
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1answer
60 views

Is there objective evidence that the US economy is “booming”?

I realize that it's the political pundits that are saying it, but they never seem to provide evidence that the economy is "booming". The dictionary definition of "booming" is having a period of ...
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Social conflicts in economic growth models

I'm highly interested in theories and models which explain how do social conflicts influence economic growth. What papers on the topic can you recommend? I was searching for some seminal and most ...
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22 views

Raising the elasticity of substitution in an economy

Papers such as de la Grandville (1989) and Klump/de la Grandville (2000) have shown that a higher elasticity of substitution leads to higher economic growth. My question is, if there is a way to ...
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Can the stock market grow faster than GDP indefinitely?

My understanding of conventional wisdom is that average long-term growth of advanced economies is expected to be significantly lower than the average long-term growth of the value of the largest firms ...
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59 views

Size and influence of the regulatory/supervisory sector

I am interested in the size of what I call the regulatory/supervisory sector in Western economies. A regulatory/supervisory (R&S) activity involves either: Determining a set of rules economic ...
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42 views

Economic impacts of Migration on the Labour Market

Many natives don't prefer foreigners taking their jobs, is it actually a bad thing for the countries economy?
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50 views

Reference Request: Primer on Relationship Economic Growth and Science / Technology

I'm in the early stages of planning a research agenda in this area, which means studying the current literature with an eye for further research opportunities. The Economics of Science and ...
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1answer
113 views

How to check whether the production function below is neoclassical or not

Say I'm given the production function of the form \begin{equation*} Y= F(K,L,A) = (\alpha K^{\epsilon} + (1 - \alpha)Y^{\epsilon})^{\frac{1}{\epsilon}} \end{equation*} Where $\epsilon, \alpha \in (0,...
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1answer
27 views

Does GNI change once it has been published?

From what I understand, GNI is published for the last year once the year has ended I am trying to have a look at the GNI for Korea for the past couple of years The official GNI is published by ...
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89 views

Does Economic Growth Lead to Inflation?

As an answer to this question, it was stated that Economists believe that higher growth rates tend to also mean higher inflation rates. As a non macro-economist, I am wondering if this is true? ...
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33 views

Disruption vs economic growth vs inflation

On the terms: Disruption is when new players earn say 1m but take over of a 100m market segment, causing damage to well established but less innovative businesses economic growth is what we read ...
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140 views

Estimating Endogenous vs Exogenous growth models

Exogenous economic growth models (mostly those that take technological progress, or change in TFP as exogenous and random) are rather easy to estimate econometrically. But how about endogenous ...
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89 views

The Next Breakthrough of Growth Economics

Romer has once said, that the growth economics has not had a breakthrough after his work of endogenous model of 1990's. What could somehow prove his saying is that we rarely see the theoretical ...
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160 views

How does Bolivia maintain its high economic growth and the highest direct foreign investment in South America, despite its economic policies?

Nationalization of industries has always been anathema to foreign investment yet Bolivia now has the highest foreign direct investment despite Evo Morales' policies. Also not that it is always bad but ...
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Solution method in Smith (2006) A Closed Form Solution to the Ramsey Model

I am trying to understand the way Smith demonstrates that the general solution to his equation (12) is (13) (see page 6). (12) \begin{eqnarray} \dot{z} &=& (1- \alpha)\left[1-\left(\delta +...
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Does trade lead to economic growth in the most basic models of trade?

In the standard models of trade, such as Ricardo or Hecksher-Ohlin, I know that openness to trade will lead to increased consumption as (roughly) the consumption possibility frontier expands beyond ...
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392 views

Reason for Economic Slowdown in Western Nations

Why do the U.S and other major Western Countries (e.g, Canada, Germany, in contrast to India, Australia, and China) have stagnated GDP growth? Comparing the GDP growth in the post-2000s from the 1990s ...
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1answer
52 views

Bernoulli transformation in “ A Close Form Solution to the Ramsey model” by Smith (2006)

I am trying to understand the way Smith arrived from (1) and (2) to (6) and (8). Could anyone give me a hint? Thank you! It is well known that the dynamics per capita consumption $c$ and capital $...
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GDP versus GNP. Which is a better gauge of a country's economy size and prosperity?

Country A's GDP is larger than Country B's GDP. However, Country B's GNP is larger than Country A's GNP. Which country has a stronger economy? Which country's citizens is more likely to enjoy ...
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1answer
247 views

Labour-saving vs. Labour-augmenting technical change

I've read a number of posts on the above topic but none refers to published empirical papers. Google searches have been hopeless. Does anyone know of any paper on empirical derivation of technical ...
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54 views

A growth model with regime switch

I have a very general question. I am reading this paper : http://www.webmeets.com/files/papers/eaere/2015/177/Discounting-HelsinkiBlind.pdf There is a catastrophic event probability and after the ...
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436 views

Is inequality good for growth? [closed]

I was reading about the debate about income inequality and I would like to know your opinion on the matter. Basically, the positions are two: the classical one, which states that inequality is good ...
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1answer
87 views

Can saddle path not go through the origin in Ramsey model?

In my case, the utility function is CEIS and discrete, the production fuction is $f(k_{t})=k_{t}^\alpha$, the budget constraint is $f(k_{t})+(1-\delta)k_{t}=c_{t} + k_{t+1}$. I use Jacobian matrix and ...
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208 views

Is the locus of consumption in Ramsey growth model a vertical line?

In almost all documents I have read on the internet, the locus of consumption where $C_{t} = C_{t+1}$ seems to be a vertical line as shown below. However, my teacher said it could well be not a ...
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1answer
395 views

Difference between Maximum Output and Potential Output

In macroeconomics, what is the difference between potential output and maximum output? Or they are simply equivalent concepts? If they are different, how can we graph it in comparison to LRAS on AD-AS ...
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In economic modelling, how are we sure the linearized equilibria behave similarly to original equilibria?

The following problem is in the context of continuous time, although I suspect something could be said about discrete time also. Let's assume that we have the following equation: $$\dot x=f(x)$$ ...
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1answer
70 views

Was there a Role of Technology in Macroeconomic Models before Solow?

Was the role of technological progress formalised by Solow (1956) for the first time? or at least he provided the initial formal insight into the role of technological progress in economic growth?
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151 views

How would gross world product look like if fossil fuel is treated as capital and not as income?

The idea to treat fossil fuel as capital is found in the first chapter of the book "Small is Beautiful: (A Study of) Economics as if People Mattered" (1973) by E. F. Schumacher. Is there recent ...
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27 views

Discrete returns versus log-returns

I read this link and it is very helpful. However, if log-returns are easier for time-aggregation, then why do economists work with discrete returns e.g. in GDP growth?
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How to pin down the bias and its/their sources in derived technical change indices?

Using the following CES function I backed out factor-augmenting indices $A_1$ and $A_2$ using OECD country level macro data. This process is akin to Solow's (1956) method for deriving technology ...
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307 views

What is the fundamental problem with Pakistan's economy?

Why is Pakistan repeatedly defaulting? 2008 - Pakistan seeks USD9 billion IMF bailout to avert crisis 2013 - Saudi Arabia come to Pakistan’s Rescue with USD15 Billion Energy Bailout Deal 2014 - ...
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148 views

Industrial Revolution: Induced technical change and factor shares

I have been reading about various explanations for the British industrial revolution. A strand of research lead by Allen (2009) tries to provide an incentives based explanation whereby high wage and ...
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2answers
748 views

Proxies for technological change in an economy?

I am writing a paper on the application of Value-Added TFP to measurement of technological change. Just thinking of throwing in a few variables into my regression. I have ICT capital share (as seen in ...
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1answer
325 views

Has US real median personal/household income been stagnant since the late 1970's/early 1980's?

This is referring to an earlier question: Why are real median household incomes stagnant? How do the following graphs actually tell you that US real median personal/household income has been stagnant ...
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1answer
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Does the existence of insurance markets negate the broken window fallacy?

In the wake Harvey and Irma, I did some reading on the Broken window fallacy. It makes sense on it's face that after paying the glazier for the broken window, the shopkeep could not spend his six ...
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Sources of Growth and co-integration: production function approach

I am experimenting with time series data to gauge the importance of factors of production i.e. labour force, capital stock, energy, land, etc. in output growth. One venue I am looking into is the ...
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1answer
595 views

Cobb-Douglas nested in CES model

Assume, using the following equation $Y=[((A_1L)^\alpha K^\beta)^\sigma+ (A_2X^\gamma)^\sigma]^{1/\sigma}$, we back out (obtain) the evolution of $A_1$ & $A_2$. Can we interpret $A_1$ as labour-...
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1answer
57 views

Who said that growth would stop because of satiation?

I have a vague recollection I am unsuccessfully trying to find an exact reference for. I recall watching an interview of Jacques Attali about a new book of his (maybe 6 or 7 years ago) where he ...
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Creative destruction and quality-adjusted inflation rate.

I'm reading this article in VoxEU.org, and there's the following paragraph: If the statistical office is correct to assume that the quality-adjusted inflation rate is the same for creatively ...
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1answer
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How is wealth created? [duplicate]

The production of 'goods and services' and 'innovation' is the usual answer. I feel that doesn't really answer the question. These things can be traded for wealth but they don't generate new wealth. ...
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1answer
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Induced technical change vs. directed technical change

I am trying to get a better grip on the literature on directed technical change and induced technical change. In other words, I am trying to understand if these concepts are the same and used ...
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Is there any index which relates population growth rate with food production growth rate?

I would like to know if there is an index which shows if food production growth is keeping pace with population growth worldwide. I know there are population growth rates available, for example for ...
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1answer
183 views

During an economic expansion, how do the ratios of Return on Equity and Return on Asset are affected?

From my perspective, during an economic expansion, industrial production, employment, personal incomes and sales are increased excluding the inflation rate. To be more specific, companies buy new ...
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51 views

Is NIIP a good measure of a country economical development?

In another question I asked someone pointed me to an answer where NIIP (Net International Investment Position) was mentioned as a measure of economical development, which I already heard about it and ...
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1answer
63 views

Which measures are there to evaluate a country economical development? [duplicate]

I'm familiar with the measures of Gross domestic product (GDP PPP) total, per capita and GDP nominal total and per capita. But I'm not sure if these measures evaluate the economical development of a ...
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1answer
52 views

Human capital for under developed countries

I am currently undergoing a study on economic growth in 11 countries: Bangladesh, Egypt, Indonesia, Iran, Mexico, Philippines, Pakistan, South Korea, Turkey and Vietnam. I plan to use panel regression....