We address the issue of optimal growth when standard-of-living aspirations are transmitted from one generation to the next. We derive the condition for the optimal solution to be stable in the saddle-point sense and show that this optimal solutionmay display damped oscillations even when the...

In a neoclassical economy with endogenous capital- and labor-augmentingtechnical change the steady-state growth rate of output per worker is shown to increasein the elasticity of substitution between capital and labor. This conrms theassessment of Klump and de La Grandville (2000) that the...

In recent times, Sraffian Supermultiplier Model (SSM) (Freitas & Serrano, 2015; Serrano, 1995; Serrano et al., 2019) has become prominent in both theoretical and empirical discussions within the demand-led-growth framework. The SSM has three distinctive features: the rate of growth of output is...

In this paper we show that vocational training is an important determinant of productivity growth. We construct a multi-country, multi-sectoral dataset, and quantify empirically to what extent vocational training has contributed to increase the growth rate of labor productivity in Europe between...

China's rapid growth has been driven by policy reforms that significantly reduce market frictions. Policy reforms are determined by the government according to its own politico-economic considerations. This paper embeds these politico-economic considerations in a macro model of China to...

A large body of evidence suggests that poor countries tend to invest less (have lower PPP - adjusted investment rates) and to face higher relative prices of investment goods. It has been suggested that this happens either because these countries have lower TFP in the investment - good producing...

The neo-classical theory contends that at the steady-state golden rule level of capital, the more significant determinants of long-run economic growth are increasing labour efficiency and technological growth. Further, when the capital stock of a country is above the golden rule level capital,...

In the last few decades, real GDP growth and investment in advanced countries have declined in tandem. This slowdown was not the result of weak demand (there has been no shift along the Okun curve), but of a decline in potential output growth (which has shifted the Okun curve to the left). We...

We study the implications of the creative destruction lifecycle of innovation for asset prices. We develop a general equilibrium model of endogenous firm creation and destruction where 'incremental' innovations by incumbents and 'radical' innovations by entrants drive productivity improvements....