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A recent wave of economic research has studied the transformation of China from a poor country in the 1970s to a middle-income economy today. Based on this literature, we discuss the factors driving China’s development process. We provide a historical account of China’s rise, fall, and...
Persistent link: https://www.econbiz.de/10010886217
While most of the literature explaining the change in consumption composition has focused on the role of relative prices and non-homothetic preferences, this paper examines the importance of preference shifts. I introduce dynamics in preferences and find that they play a relevant role and that...
Persistent link: https://www.econbiz.de/10010939489
Saving and growth are strongly positively correlated across countries. Recent empirical evidence suggests that this correlation holds largely because high growth leads to high saving, not the other way around. This evidence is difficult to reconcile with standard growth models, since...
Persistent link: https://www.econbiz.de/10005233508
This paper incorporates the economic theory of predation into the theory of economic growth. The analytical framework is a dynamic general-equilibrium model of the interaction between two dynasties, one of which is a potential predator and the other is its prey. Each generation of each dynasty...
Persistent link: https://www.econbiz.de/10005777382
We develop a simple growth model with imperfect competition in which demand conditions can affect the dynamics of capital accumulation, hindering or enhancing growth. In our model the elasticity of the demand schedule faced by a typical firm depends on the aggregate savings rate. The latter...
Persistent link: https://www.econbiz.de/10005124443
Our objective is to investigate, how the combination of habit formation with endogenous capital utilization decisions affects the process of economic growth. We find that in the presence of positive productivity growth, habit formation in consumption reduces the rate of capital utilization while...
Persistent link: https://www.econbiz.de/10010682582
This paper studies the effects of educational borrowing constraints on economic growth and welfare. We consider a three-period-lived overlapping generations model in which individuals finance their educational expenditures by borrowing. We show that if the elasticity of human capital to...
Persistent link: https://www.econbiz.de/10010594191
We propose a simple and powerful numerical algorithm to compute the transition process in continuous-time dynamic equilibrium models with rare events. In this paper we transform the dynamic system of stochastic differential equations into a system of functional differential equations of the...
Persistent link: https://www.econbiz.de/10010719548
Studying a one-sector economy populated by finitely many heterogeneous households that are subject to no-borrowing constraints, we confirm a conjecture by Frank P. Ramsey according to which, in the long run, society would be divided into the set of patient households who own the entire capital...
Persistent link: https://www.econbiz.de/10011043009
We study transitional dynamics and speed of convergence in economic growth. Based on a canonical framework the analysis revisits both “old” and “new” growth literature along three dimensions: (i) What if growth is not exogenous but endogenous and driven by learning by doing? (ii) What if...
Persistent link: https://www.econbiz.de/10011065316