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Rich transitional dynamics, physical capital, and technology intensity

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  • Pedro Mazeda GilBy
  • André Almeida
  • Sofia B.S.D. Castro

Abstract

This paper develops a non-scale growth model with physical capital and two types of R&D under a lab-equipment specification, where both the intensive and extensive growth margins are fully endogenous. We study analytically the long-run equilibrium and transitional dynamics properties of the model, and establish meaningful sufficient conditions for saddle-path stability. We relate the different combinations of initial conditions of the dynamical system with the observation of monotonic versus non-monotonic transitional dynamics. Our model is able to predict monotonic, hump-shaped, and inverted hump-shaped trajectories, therefore encompassing the diverse convergence behaviour observed in the empirical data on modern growth experiences.

Suggested Citation

  • Pedro Mazeda GilBy & André Almeida & Sofia B.S.D. Castro, 2017. "Rich transitional dynamics, physical capital, and technology intensity," Oxford Economic Papers, Oxford University Press, vol. 69(3), pages 678-706.
    • Handle: RePEc:oup:oxecpp:v:69:y:2017:i:3:p:678-706.
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    File URL: http://hdl.handle.net/10.1093/oep/gpw045
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    Citations

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    Cited by:

    1. Gil, Pedro Mazeda & Iglésias, Gustavo & Guimarães, Luís, 2023. "Endogenous growth and monetary policy: How do interest-rate feedback rules shape nominal and real transitional dynamics?," Journal of International Money and Finance, Elsevier, vol. 138(C).
    2. He, Qichun & Wang, Xilin, 2020. "Money, Human Capital and Endogenous Market Structure in a Schumpeterian Economy," MPRA Paper 104609, University Library of Munich, Germany.
    3. Kuwahara, Shiro, 2019. "Multiplicity and stagnation under the Romer model with increasing returns of R&D," Economic Modelling, Elsevier, vol. 79(C), pages 86-97.
    4. Pedro Mazeda Gil & Gustavo Iglésias,, 2018. "Endogenous Growth and Real Effects of Monetary Policy: R&D and Physical Capital Complementarities in a Cash-in-Advance Economy," CEF.UP Working Papers 1802, Universidade do Porto, Faculdade de Economia do Porto.
    5. Wei‐Neng Wang & Chia‐Ying Liu & Juin‐Jen Chang, 2021. "Tax policy implications for a two‐engine growing economy," Southern Economic Journal, John Wiley & Sons, vol. 87(3), pages 979-1009, January.

    More about this item

    JEL classification:

    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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