Although conventional wisdom suggests that reducing military spending may improve a country's economic growth performance, empirical studies have produced ambiguous results. This paper extends a standard growth model and obtains consistent panel data estimates of the growth retarding effects of...

This article examines the real convergence hypothesis in OPEC countries (Algeria, Angola, Ecuador, Gabon, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, United Arab Emirates and Venezuela) using time series techniques and allowing for structural breaks. The main results show...

Using a general equilibrium growth model with a costly schooling process, this paper analyses the effect on economic growth of educational reform that allocates more resources to the schooling sector to raise the quality of human capital. It shows that the positive effect of improved quality on...

The aggregate neoclassical growth model - with means-tested subsidies whose replacement rates began rising at the end of 2007 as its only impulse - produces time series for aggregate labor usage, consumption, investment, and real GDP that closely resemble actual U.S. time series. Despite having...

To address how technological progress in financial intermediation affects the economy, a costly-state verification framework is embedded into the standard growth model. The framework has two novel ingredients. First, firms differ in the risk/return combinations that they offer. Second, the...

The capital-labor substitution elasticity and technical biases in production are critical parameters. The received wisdom claims their joint identification is infeasible. We challenge that interpretation. Putting the new approach of "normalized" production functions at the heart of a Monte Carlo...

In the aftermath of World War II, the world's economies exhibited very different rates of economic recovery. We provide evidence that those countries that caught up the most with the U.S. in the postwar period are those that also saw an acceleration in the speed of adoption of new technologies....

We present a tractable model for the analysis of the relationship between economic growth and the intensive and extensive margins of technology adoption. At the aggregate level, our model is isomorphic to a neoclassical growth model. The microeconomic underpinnings of growth come from technology...

This paper aims to explore the labour productivity convergence in manufacturing sector across fifteen major Indian states during 1979-80 to 2000-01, using cross-section analysis. The analysis examines the convergence hypothesis taking both absolute and conditional convergence into consideration....

In this paper, we analyze the importance of the frequency of decision making for macroeconomic dynamics. We explain how the frequency of decision making (period length) and the unit of time measurement (calibration frequency) differ and study the implications of this difference for macroeconomic...