Optimal Growth with Endogenous Technical Progress: Hicksian Bias in a Macro Model

If productivity growth is endogenous, the question of whether to allocate some resources to increase the efficiency of capital needs to be examined in spite of the conventional wisdom that only Harrod-neutral technical progress is compatible with the steady state. This paper describes the crucial role that the production technology and research sectors play in determining the allocation of resources for accumulating physical capital and enhancing the productivity of inputs. We develop a model of biased growth, where, even in the steady state, the efficiency of capital and labour are increasing due to the allocation of resources to the research sector.
JEL Classification Numbers: C62, O31.     

The Role of Monetary Policy in Japan: A Break in the 1990s?

This article documents time series evidence suggesting the case for a possible structural break in the role of Japan's monetary policy during the 1990s. It uses a simple vector autoregressive framework and offers some suggestive results: While a persistent effect of monetary policy on real output is detected over the full sample of 1975–1998 and the subsample that ends in 1993, such effect disappears with the recent subsample of the 1990s. The stability analysis also provides more specified evidence that there is a break in the reduced form dynamic system in 1995. Some interpretations are offered to intuitively support these findings. J. Japan. Int. Econ., December 2000, 14(4), pp. 366–384. Research Institute for Economics and Business Administration, Kobe University, Rokko, Nada, Kobe 657-8501, Japan Copyright 2000 Academic Press.Journal of Economic Literature Classification Numbers: E52, E32.     

Market behavior and the types of production functions

The paper presents a unified approach to theory and estimation of production functions based on a simple observation that any production function has a unique representation of its isoquants in terms of the differential equation which may be observable in market. Expressing the marginal rate of substitution between two inputs as the differential equation in these two inputs, various classes of production functions are obtained by integrating this differential equation. Not only does this general approach yield a systematic framework for all known forms but it also generates new types of production functions. Empirical application is also indicated.     

Optimal strategies in a developing economy

Zusammenfassung Optimale Strategien in einer sich entwickelnden Volkswirtschaft. — Der vorliegende Aufsatz untersucht optimale Strategien für Industrialisierung, Vollbesch?ftigung und ein sich selbst tragendes Wachstum in einem Entwicklungsland. Der Autor bemüht sich zu zeigen, da\ es zahlreiche nützliche wirtschaftspolitische Ma\nahmen zur F?rderung der wirtschaftlichen Entwicklung gibt. Im ersten Abschnitt der Abhandlung werden die verschiedenen wirtschaftspolitischen Ziele in einem Entwicklungsland analysiert. Der zweite Abschnitt enth?lt das grundlegende makro?konomische Entwicklungsmodell bei Annahme einer konstanten Wachstumsrate der Bev?lkerung. Im dritten Abschnitt wird eine Untersuchung der wichtigsten Voraussetzungen einer optimalen Entwicklung bei Verwendung des im zweiten Kapitel dargestellten Modells vorgenommen. Der vierte Abschnitt ist der Formulierung eines Modells gewidmet, das die Besch?ftigungs- und Bev?lkerungsprobleme in die Betrachtung einbezieht. In diesem Abschnitt werden optimale Strategien für Vollbesch?ftigung und ein sich selbst tragendes Wachstum untersucht. Einige komplizierte technische Berechnungen werden im Anhang vorgelegt.

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Résumé Stratégies optimales dans une économie en train de développement.— Dans cet article, on étudie les stratégies optimales pour l’industrialisation, le plein emploi et un accroissement économique qui se tient soi-même dans un pays en développement. L’auteur cherche à démontrer qu’il y a beaucoup de mesures de politiques économique utiles à avancer le développement. Dans la première section de l’article, sont analysés en général les différents buts d’une économie en développement. La seconde section présente le modèle fondamental de macro-développement sous un taux constant d’accroissement de la population. Dans la troisième section, on donne l’analyse principale d’un développement optimal, en utilisant le modèle de la seconde section. La quatrième section est consacrée à la formulation d’un modèle qui tient compte des problèmes de l’emploi et de la population. Dans cette section, on étudie les stratégies optimales pour un plein emploi et un accroissement économique qui se tient soi-même. Quelques calculs techniques compliqués sont donnés dans l’annexe.

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Resumen Estrategias óptimas en una economía en desarrollo.— En el presente artículo se analizan estrategias óptimas para la industrializatión, el pleno empleo y un crecimiento económico autónomo en un país en desarrollo. El autor trata de demostrar de que existen numerosas medidas político-económicas útiles para el fomento del desarrollo económico. En la primera parte del artículo se estudian las diversas metas político-económicas en un país en desarrollo. En la segunda parte se presenta un modelo macroeconómico de desarrollo bajo el supuesto de un crecimiento demográfico constante. Este modelo se aplica en la tercera parte para analizar los condicionantes de un desarrollo óptimo más importantes. En la cuarta parte se formula un modelo con la inclusión de los problemas de población y empleo. Ademàs se analizan estrategias óptimas para el pleno empleo y un crecimiento económico autónomo. El apéndice contiene algunos càlculos técnicos complicados.

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Riassunto Ottimali strategie in un’economia in sviluppo.— Il presente saggio esamina ottimali strategie per industrializzazione, piena occupazione ed una crescita che si sostiene da sé in un Paese in via di sviluppo. L’autore cerca di mostrare che ci sono numerosi provvedimenti per la promozione dello sviluppo industriale. Nella prima parte del saggio sono analizzate le diverse mete politico-economiche in un Paese in via di sviluppo. La seconda parte contiene il modello fondamentale macroeconomico di sviluppo basato sul presupposto di una costante rata di crescita della popolazione. Nella terza parte viene intrapreso un esame dei presupposti più importanti di uno sviluppo ottimale impiegando il modello rappresentato nel secondo capitolo. La quarta parte è dedicata alla formulazione di un modello che include nella considerazione i problemi dell’occupazione e della popolazione. In questa parte sono esaminate ottimali Strategie per piena occupazione ed una crescita che si sostiene da sé. Alcuni complicati calcoli tecnici vengono presentati in appendice.

     

Adjustment time and economic growth revisited

Since the theory of the adjustment time in a neoclassical growth model was first published close to two decades ago [Sato Sato, February 1963, Sato, June 1964], there have appeared a number of interesting articles dealing with different aspects of adjustment time and economic growth. The purpose of this note is to verify the original conclusions in the framework of variable elasticity of substitutions (VES) production functions. All of the other assumptions are preserved. The results indicate that the original assertion concerning the length of time needed for 90 percent of the adjustment applies to a non-Cobb-Douglas production function as well. “Vicinity” (90%) of the new equilibrium can be reached only after a sufficiently long period of time—approximately 100 years on the average. Furthermore, the pattern of adjustment for this model is very similar to that of the original model.