Technology, demand and distribution: a cumulative growth model with an application to the Dutch productivity growth slowdown

This paper argues that the case for real wage growth restraint,and the consequent restoration of profitability, which the mainstreamconsensus regards as a necessary condition for sustained outputand productivity growth, is based on weak foundations, becauseit neglects the negative impact of wage moderation on productivitygrowth. Using a general Keynesian growth model, which integratesa (wage-led or profit-led) demand regime and a productivityregime (incorporating the productivity-growth enhancing effectsof higher demand and higher real wages), the conditions areidentified under which real wage restraint fails to raise outputand productivity growth. The model is applied empirically tothe Netherlands (1960–2000).     

On the dynamics of a three-sector growth model

Uzawa’s two-sector growth model is extended into a three-sector model, where the labor growth rate is variable and bounded over time. The solution of this economic system is determined, as well as its long-run growth and asymptotic stability are investigated.      

The network of networks: Localized technological change in telecommunications and productivity growth

Radical innovations in the usage of telecommunication services have drastically changed the role of telecommunications in the economy. Today the usage of telecommunications services is associated with the opportunity to extract significant quasi-rents. An empirical analysis of the Italian case in the mid-eighties confirms the significant difference between telecommunications cost share and marginal productivity levels. The opportunity to reap transient quasi-rents has in turn pushed users to innovate so as to become major players in the arena of technological change in telecommunications and information technologies. In this context the notion of network of networks, implemented in the European Union, seems most appropriate to push the dynamic efficiency of the system and accommodate both centrifugal and centripetal innovations, yet also to retain network interoperability and interconnectivity.     

Fluctuations in convex models of endogenous growth, II: Business cycle properties

Using ideas from the endogenous growth literature, we present a model of the endogenous determination of productivity growth based on individual worker decisions about human capital investment. We calibrate a version of the model to match long run growth facts from the US and study the business cycle properties of this model. This approach offers improvements along several dimensions over standard exogenous growth methodologies. Most importantly, our stochastic endogenous growth model generates much greater serial correlation in output growth and labor supply volatility relative to its real business cycle counterpart. We conclude that using the extra discipline of reproducing the trend productivity growth features of the data endogenously constitutes an important missing component from the real business cycle approach.     

Inequality,unemployment, and endogenous growth in a political economy with a minimum wage

This paper presents development of an endogenous growth model with heterogeneous households and political determination of the minimum wage. We investigate the interaction of inequality, unemployment, and economic growth. First, the arguments in this paper show that a positive correlation exists between inequality and unemployment, Second, the interaction between inequality and economic growth is shown to be a positive relation if high inequality pertains in a society. It is a negative relation if low inequality pertains.      

A dual economy model of endogenous growth with R&D and market structure

This paper develops a dual economy endogenous growth model to consider the effects of market structure and innovation on the rate of growth of an economy. There is an innovative goods sector where firms consistently invest in research and development to produce new products within a framework of monopolistic competition. Firms in the traditional goods sector produce a homogenous good, compete in a form of oligopoly (quantity competition), and seek to reduce their production costs. It is shown that growth is increasing in the market power that firms in the innovative goods sector obtain but decreasing in the equilibrium number of firms in the traditional goods sector.     

国际R&D溢出与生产率增长——基于APEC视角的动态面板数据分析

本文从服务贸易进口、FDI流入和生产率积聚效应等方面扩展了CH模型,并以APEC成员作为研究对象,运用动态面板数据模型和脉冲响应函教研究了全要素生产率、技术效率和技术进步的动态变化规律,得出了全要素生产率、技术效率和技术进步存在显著的积聚效应;本国R&D资本存量有助于提升技术效率,但是能否促进技术进步刖依赖于R&D投入强度;和通过服务贸易渠道获得的国际R&D溢出对全要素生产率和技术进步均有显著的促进作用等三个一般性结论.     

Entrepreneurship and productivity: The slow growth of the planned economies

Trends in gross domestic product (GDP) and total factor productivity (TFP) growth in the former socialist economies seem to indicate that these economies were converging to unusually low long-run growth rates in the late 1980s. In this paper we develop an endogenous growth model of entrepreneurship that is able to account for the difference in long-run performance between centrally planned economies and market-oriented ones. Long-run growth rates of output and productivity are determined by the growth of the stock of managerial knowledge, which in turn depends on the share of the population involved in entrepreneurial activities and on the time that spent on those activities. We analyze the effect of two characteristics of centrally planned economies on their growth performance. First, in centrally planned economies factors of production are distributed by the central planner to the firms' managers through a contest that uses up some of the managers' productive effort. Second, the leadership is “egalitarian,” in the sense that it treats individuals with different abilities equally. We show that these two features reduce the fraction of people becoming entrepreneurs/managers, as well as their managerial effort, which in turn reduces long-run output and TFP growth. Furthermore, we find that centrally planned economies have lower income inequality and slightly higher capital–output ratios, which is consistent with these countries' experiences.     

Even the bad times are good: a behavioural theory of transformation pressure

A theory of transformation pressure was developed in Swedenin the 1990s which suggested that structural changes, rationalisationsand innovations are stimulated by profit crises, arising, forexample, from negative demand shocks and restrictive economicpolicies. Firms will then either become more creative or abandonan overconfident, risk-prone and irrational status quo strategy.A qualified theory states that productivity will increase asexternal pressures become stronger but only up to a certainpoint. A competing qualified theory maintains that productivityis maximised if periods of hard pressure are succeeded by periodsof financial and technical consolidation, scale advantages andweaker demands for defensive actions to raise productivity.     

Health and infrastructure in a model of endogenous growth

This paper studies the optimal allocation of government spending between infrastructure and health (which affects labor productivity as well as household utility) in an endogenous growth framework. A key feature of the model is that infrastructure affects not only the production of goods but also the supply of health services. The rate of time preference is also endogenously related to health outcomes. The first part considers the case where health enters as a flow in production and utility, whereas the second focuses on a “stock” approach. Growth- and welfare-maximizing rules for income taxation and the allocation of public spending are derived.     

浅析转型中的中国经济

从中国目前的经济成就和问题谈起,运用包容性增长和科学发展观的理念和方法来对中国经济发展转型进行考察,并得出与保障中国经济平稳、快速发展相配套的必要措施。     

Money and growth in a cash-in-advance economy with costly credit

This paper develops a stochastic growth model with a cash-in-advance constraint, costly credit, and intermediary services. We study how the behavior of financial intermediaries affects the relationship between economic growth and the monetary system. We show that the payment that intermediaries charge for providing financial services influences the money–growth relationship. When the intermediation cost increases proportionally with credit purchases, we do not observe any influence of growth on the monetary system. When the intermediation cost is not proportional to credit purchases, growth is responsible for a transformation of the monetary system, i.e. money is relatively driven out of the economy as the economy grows.     

Explaining the US–EU productivity growth gap: Structural change vs. intra-sectoral effect

This paper proposes a decomposition of labour productivity growth in the EU15 and the the US since the mid 1990s. The results suggest that the EU's relative slowdown is due to modest “pure” gains of productivity within sectors.     

Vintage capital,market structure and productivity in an evolutionary model of industry growth

This paper examines the effects of inter-firm variation in vintage equipment replacement policies on industry productivity and structure using an evolutionary model based on Nelson-Winter. Traditional industry productivity measures assume a graduated replacement policy with low variation across firms in the average age of the capital stock. This approach allows for inter-firm policy variation. The first part reviews the neoclassical treatment of vintage capital investment; the second part outlines an evolutionary model of vintage replacement in the context of industry growth; and the third part presents results of simulation experiments focused on the relationship between vintage replacement patterns and industry productivity growth. Findings suggest that inter-firm differences in vintage capital investment policies may account for significant shifts in the rates of industry productivity growth and changes in market structure.     

Effects of temporal heterogeniety in the Baumol-Wolff productivity growth model

Summary. In their utilization of R&D (information) output, different sectors of a heterogeneous industry display different reaction times. This paper analyzes the effects of this temporal heterogeniety on output and productivity for an extended version of the Baumol-Wolff model. Results include conditions implying persistent, non-decaying oscillations in the output and hence also in the productivity rate. Received: January 26, 1998; revised version: January 8, 1999     

X-Factor updating and total factor productivity growth: the case of peruvian telecommunications, 1996–2003

This paper measures TFP growth of Telefonica del Peru, and based on this growth rate computes a telecommunications X-factor or offset. More broadly the paper analyses the problem of updating an X-factor under existing price cap regulation. A revised offset must account for the possible restructuring of service offerings resulting from improved efficiencies in response to price cap incentives. Our updating framework focuses on efficiency criteria, and based on economic principles emphasizes the continuity between prior and continuing standards. In the case of Peru, based on annual average TFP growth of 1.66%, the X-factor is computed to be 4.06% per year. An erratum to this article can be found at     

Disutility of pollution and endogenous growth

Endogenous growth is generally built on a positive externality hypothesis which is the opposite of a negative externality caused by pollution. We study a linear technology with simple assumption: an aggregate capital stock which represents a learning by doing effect and a pollution flow proportional to production. In this framework, we analyse the precise effects on growth of the disutility of pollution and its interaction with the utility of consumption in an economy without abatement technology. The decentralized equilibrium always leads to unlimited growth, but optimal growth is often limited (the negative effect of pollution dominating the positive effect of learning by doing). In this case, the optimal policy which leads the decentralized economy to follow the optimal growth path is to tax capital; in contrast with the optimal subsidy policy in an economy without pollution. When an abatement technology is introduced, the optimal solution can lead the economy to unlimited growth, whatever the form of the utility function.     

Exchange rate changes and endogenous terms of trade effects in a small open economy

This paper shows that the small-country assumption of dependent-economy models is unlikely to hold for many of the cases in which this class of models is used, for example, in the analysis of a terms of trade shock in the “commodity currency” models. When a shock affects most or all of the small countries exporting a commodity, the combined exchange rate effects will result in endogenous terms of trade changes even for those countries too small to individually affect world markets. The paper also explores the possible implications of these secondary terms of trade changes for the dependent-economy models.     

Rate of profit and interest in a growth theory with endogenous money

This paper attempts to incorporate an endogenous money approachinto post-Keynesian growth theory in order to derive the fullemployment equilibrium rate of interest as well as that of profit.This rate of interest, named the ideal rate of interest, differsfrom the rate of profit in that it is in proportion to a monetaryvariable, not a real variable. Further, the rate of profit alsodiffers from the rate of interest as a premium because it isproductive. The rate of interest could be important in explainingcircumstances in which financial capital has been accumulatedin excess.     

Culture and human capital in a two-sector endogenous growth model

Recent literature in the field of cultural economics highlights a possible inversion in the usual causality relation (from economic growth to culture) and points out that culture may represent an important driver of economic growth. By viewing culture in line with Throsby’s (2001) definition of cultural capital (i.e., an asset of tangible and intangible cultural expressions), in this article we analyze one possible channel through which culture may positively affect economic growth, namely the existence of a relationship of complementarity between cultural and human capital investments. Using a two-sector endogenous growth model, we find that in the long run a higher growth rate of real per-capita income can be attained the more cultural and human capital investments are complementary for each other in the process leading to agents’ skill acquisition. We also analyze the conditions under which an increase of the cultural capital share in total GDP can be conducive to a rise of real per-capita income.