Groth, Christian and Wendner, Ronald (2012): Embodied learning by investing and speed of convergence.
This is the latest version of this item.
Download (272kB) | Preview
Download (299kB) | Preview
Based on a dynamic general equilibrium model we study how the composition of technical progress, along three dimensions, affects transitional dynamics, with an emphasis on the speed of convergence. The three dimensions are, first, the degree to which technical change is embodied, second, the extent to which an endogenous source, learning, drives productivity advances, and, third, the extent to which the vehicle of learning is gross investment rather than net investment. The analysis shows that the speed of convergence, both ultimately and in a finite distance from the steady state, depends strongly and negatively on the importance of learning in the growth engine and on gross investment being the vehicle of learning rather than net investment. In contrast to a presumption implied by ``old growth theory'', a rising degree of embodiment in the wake of the computer revolution is not likely to raise the speed of convergence when learning by investing is the driving force of productivity increases.
|Item Type:||MPRA Paper|
|Original Title:||Embodied learning by investing and speed of convergence|
|English Title:||Embodied learning by investing\\and speed of convergence|
|Keywords:||Transitional dynamics, speed of convergence, learning by investing, embodied technological progress, decomposable dynamics|
|Subjects:||O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O41 - One, Two, and Multisector Growth Models
D - Microeconomics > D9 - Intertemporal Choice > D91 - Intertemporal Household Choice ; Life Cycle Models and Saving
|Depositing User:||Ron Wendner|
|Date Deposited:||17. Oct 2012 19:54|
|Last Modified:||07. Nov 2014 14:38|
Acemoglu, D. (2009), Introduction to Modern Economic Growth, Princeton: Princeton University Press.
Aghion, P., P. Howitt (1998), Endogenous Growth Theory, Cambridge (Mass.): MIT Press.
Aghion, P., P. Howitt (2009), The Economics of Growth, Cambridge (Mass.): MIT Press.
Arrow, K. J. (1962), The Economic Implications of Learning by Doing. Review of Economic Studies 29, 153--73.
Barro, R. J., X. Sala-i-Martin (1992), Convergence, Journal of Political Economy 100, 223--251.
Barro, R. J., X. Sala-i-Martin (2004), Economic Growth, 2nd ed., Cambridge (Mass.): MIT Press.
Boucekkine, R., F. del Rio, O. Licandro (2003), Embodied Technological Change, Learning-by-doing and the Productivity Slowdown. Scandinavian Journal of Economics 105 (1), 87--97.
Boucekkine, R., T. Ruiz-Tamarit (2004), Imbalance Effects in the Lucas model: An Analytical Exploration, Topics in Macroeconomics 4 (1) Article 15.
Chatterjee, S. (2005), Capital Utilization, Economic Growth and Convergence, Journal of Economic Dynamics and Development 29, 2093--2124.
de la Croix, D. P. Michel, A Theory of Economic Growth, Cambridge, UK: Cambridge University Press.
Eicher, T., S. J. Turnovsky (1999), Convergence Speeds and Transitional Dynamics in Non-Scale Growth Models, Journal of Economic Growth 4, 413--428.
Evans, P. (1997), How Fast do Economies Converge?, Review of Economics and Statistics 79, 219--225.
Greenwood, J., Z. Hercowitz, P. Krusell (1997), Long-Run Implications of Investment-Specific Technological Change. American Economic Review 87 (3), 342--362.
Greenwood, J., B. Jovanovic (2001), Accounting for growth. In: New Developments in Productivity Analysis}, ed. by C. R. Hulten, E. R. Dean, M. J. Harper, NBER Studies in Income and Wealth, Chicago: University of Chicago Press.
Groth, C. (2010), Embodied Learning and Growth: The Simple Analytics, Working Paper, Department of Economics, University of Copenhagen.
Groth, C., K.-J. Koch, T. M. Steger (2010), When Economic Growth is Less Than Exponential, Economic Theory 44, 213--242.
Hornstein, A., P. Krusell (1996), Can technology improvements cause productivity slowdowns? NBER Macroeconomics Annual 11, 209--259.
Hornstein, A., P. Krusell, G. L. Violante (2005), The Effect of Technical Change on Labor Market Inequalities. In: Handbook of Economic Growth, vol. 1B, ed. by P. Aghion, and S. N. Durlauf, Amsterdam: Elsevier, 1275--1370.
Islam, N. (1995), Growth Empirics. A Panel Data Approach, Quarterly Journal of Economics 110, 1127--1170.
Jovanovic, B. (1997), Learning and Growth. In: Advances in Economics and Econometrics: Theory and Applications, vol. II, ed. by D. M. Kreps and K. F. Wallis, Cambridge: Cambridge University Press, 318--339.
Jovanovic, B., P. L. Rousseau (2002), Moore's Law and Learning by Doing, Review of Economic Dynamics 5, 346--375.
Levine, R., D. Renelt (1992), A Sensitivity Analysis of Cross-Country Growth Regressions, American Economic Review 82, 942--963.
Mankiw, N. G., D. Romer, D. Weil (1992), A Contribution to the Empirics of Economic Growth, Quarterly Journal of Economics 107, 407--438.
McQinn, K., K. Whelan (2007), Conditional Convergence and the Dynamics of the Capital-Output Ratio, Journal of Economic Growth 12, 159--184.
Ortigueira, S., M. S. Santos (1997), On the Speed of Convergence in Endogenous Growth Models, American Economic Review 87, 383 -- 399.
Phelps, E. (1962), The New View of Investment: A Neoclassical Analysis, Quarterly Journal of Economics 76 (4), 548--567.
Romer, P. M. (1986), Increasing Returns and Long-run Growth, Journal of Political Economy 94, 1002--1037.
Sakellaris, P., D. J. Wilson (2004), Quantifying Embodied Technological Change, Review of Economic Dynamics 7, 1--26.
Solow, R. M. (1960), Investment and Technical Progress. In: K. J. Arrow, S. Karlin, and P. Suppes, eds., Mathematical Methods in the Social Sciences, Stanford: Stanford University Press, pp. 89--104.
Turnovsky, S. J. (2002), Intertemporal and Intratemporal Substitution, and the Speed of Convergence in the Neoclassical Growth Model, Journal of Economic Dynamics and Control 26, 1765--1785.
Xie, D. (1994), Divergence in Economic Performance: Transitional Dynamics with Multiple Equilibria, Journal of Economic Theory 63, 97--112.
Valdes, B. (1999), Economic Growth. Theory, Empirics and Policy, Cheltenham, UK: Edward Elgar.
Williams, R. L., R. L. Crouch (1972), The Adjustment Speed of Neoclassical Growth Models, Journal of Economic Theory 4, 552--556.
Available Versions of this Item
Learning by investing, embodiment, and speed of convergence. (deposited 24. Feb 2011 18:32)
- Embodied learning by investing and speed of convergence. (deposited 17. Oct 2012 19:54) [Currently Displayed]