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- Title
TRANSITIONAL DYNAMICS OF AN ENDOGENOUS GROWTH MODEL WITH AN EROSION EFFECT.
- Authors
SEQUEIRA, TIAGO NEVES
- Abstract
The convergence features of an endogenous growth model with physical capital, human capital and R&D have been studied. We add an erosion effect (supported by empirical evidence) to this model, and fully characterize its convergence properties. The dynamics is described by a fourth-order system of differential equations. We show that the model converges along a one-dimensional stable manifold and that its equilibrium is saddle-path stable, for most plausible values for the parameters. We also argue that one of the implications of considering this ‘erosion effect’ is the increase in the adherence of the model to data.
- Subjects
MATHEMATICAL models of economic development; STOCHASTIC convergence; PERSONNEL management; LABOR supply; LABOR economics; HUMAN capital; LABOR productivity; LABOR costs; CONTRACT labor; SUPERVISION of employees
- Publication
Manchester School (1463-6786), 2008, Vol 76, Issue 4, p436
- ISSN
1463-6786
- Publication type
Article
- DOI
10.1111/j.1467-9957.2008.01068.x