Munich Personal RePEc Archive

Endogenous Growth, Semi-endogenous Growth... or Both? A Simple Hybrid Model

Cozzi, Guido (2017): Endogenous Growth, Semi-endogenous Growth... or Both? A Simple Hybrid Model. Forthcoming in: Economics Letters , Vol. 154, (May 2017)

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Abstract

First generation endogenous growth models had the counterfactual implication that the long-term growth of per-capita GDP increased with the population size. Two influential growth paradigms, the semi-endogenous and the second generation fully endogenous, eliminated this strong scale effect. Both solutions have useful aspects and insights, but very different policy implications. This paper combines both approaches into a single hybrid model class, and shows that no matter the weight assigned to each paradigm, the long-run predictions of the semi-endogenous policy dominate with high enough population growth rates, while the long-run predictions of the fully endogenous policy dominate at low population growth rates.

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