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Modern growth theory derives mostly from Robert Solow's “A Contribution to the Theory of Economic Growth” (1956). Solow's own interpretation locates the origins of his “Contribution” in his view that the growth model of Roy Harrod implied a tendency toward progressive collapse of the...
Persistent link: https://www.econbiz.de/10013084232
We study the behavior of output, employment, consumption, and investment in Germany during the Great Depression of 1928 … neoclassical growth model to investigate how much these factors contribute to the depression. We find that real wages, which were … significantly above their market clearing levels, were the most important factor for the economic decline in the depression. Changes …
Persistent link: https://www.econbiz.de/10013097364
We study the behavior of output, employment, consumption, and investment in Germany during the Great Depression of 1928 … neoclassical growth model to investigate how much these factors contribute to the Depression. We find that real wages, which were … significantly above their market clearing levels, were the most important factor for the economic decline in the Depression. Changes …
Persistent link: https://www.econbiz.de/10014125726
The GSMS-SS model shows under which conditions credit-driven economic expansions are unsustainable and how such booms revert into busts. If central banks pursue a policy of inflation targeting and prevent deflation from happening when technological progress would lower the price level, they...
Persistent link: https://www.econbiz.de/10013058914
We introduce a Ramsey growth model with incomplete markets, decentralized production, and idiosyncratic technological risk. The combination of uninsurable shocks with the precautionary motive can slow down capital accumulation or give rise to persistent fluctuations even when agents are very...
Persistent link: https://www.econbiz.de/10014036534
Many successful examples of economic development, such as South Korea, exhibit long periods of sustained capital accumulation. This process is characterized by a gradually rising investment rate along with a moderate rate of return to capital, both of which are strongly at odds with the standard...
Persistent link: https://www.econbiz.de/10013089370
Solow has repeatedly called for the development of models that combine equilibrium and out-of equilibrium outcomes or what he called a macro-economics of the medium-run. This paper recounts the history of Solow's different attempts to address this issue. It starts in early 1950s when Solow...
Persistent link: https://www.econbiz.de/10013076001
Solow has repeatedly called for the development of models that combine equilibrium and out-of equilibrium outcomes or what he called a macroeconomics of the medium-run. This paper recounts the history of Solow's different attempts to address this issue. It starts in early 1950s when Solow...
Persistent link: https://www.econbiz.de/10011706942
From its flow tide, fueled by the Cold War, to its ebbing with the anti-growth movement and the economic crises of the early 1970s, the "growthmen" of MIT stood at the center of the dominant field in macroeconomics. The history of MIT growth economics is traced from Solow's seminal neoclassical...
Persistent link: https://www.econbiz.de/10011707791
Modern growth theory derives mostly from Robert Solow's "A Contribution to the Theory of Economic Growth" (1956). Solow's own interpretation locates the origins of his "Contribution" in his view that the growth model of Roy Harrod implied a tendency toward progressive collapse of the economy. He...
Persistent link: https://www.econbiz.de/10011707818