Transitional dynamics of an endogenous growth model with an erosion effect
The convergence features of an Endogenous Growth model with Physical capital, Human Capital and R&D have been studied. We add an erosion effect (supported by empirical evidence) to this model, and fully characterize its convergence properties. The dynamics is described by a fourth-order system o...
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| Formato: | workingPaper |
| Idioma: | eng |
| Publicado em: |
2014
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| Texto completo: | http://hdl.handle.net/10362/11855 |
| País: | Portugal |
| Oai: | oai:run.unl.pt:10362/11855 |
| Resumo: | The convergence features of an Endogenous Growth model with Physical capital, Human Capital and R&D have been studied. We add an erosion effect (supported by empirical evidence) to this model, and fully characterize its convergence properties. The dynamics is described by a fourth-order system of differential equations. We show that the model converges along a one-dimensional stable manifold and that its equilibrium is saddle-path stable. We also argue that one of the implications of considering this “erosion effect” is the increase in the adherence of the model to data. |
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