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Transitional dynamics in R&D-based models of endogenous growth

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  • Steger, Thomas M.

Abstract

This paper offers a comprehensive study on transitional dynamics within R&D-based models of endogenous growth. There are two main motivations. First, the complete dynamic system for the market solution is derived in general form. Second, using this dynamic system as a unifying framework the adjustment process is analysed. In order to answer the question for the relative importance of transitional dynamics vis-à-vis balanced-growth dynamics, special emphasis is given to the rate of convergence. The investigations show that the models under study can reproduce empirically relevant pattern of development including over- and undershooting as well as growth cycles. The paper demonstrates an alternative route to growth cycles, which does not require complex eigenvalues.

Suggested Citation

  • Steger, Thomas M., 2002. "Transitional dynamics in R&D-based models of endogenous growth," Wirtschaftswissenschaftliche Diskussionspapiere 04/2002, University of Greifswald, Faculty of Law and Economics.
    • Handle: RePEc:zbw:grewdp:042002
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    References listed on IDEAS

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    More about this item

    Keywords

    Transitional dynamics; R&D-based growth; rate of convergence; dynamic systems; growth cycles;
    All these keywords.

    JEL classification:

    • O0 - Economic Development, Innovation, Technological Change, and Growth - - General
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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