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Is the asymptotic speed of convergence a good proxy for the transitional growth path?

Papageorgiou, Chris; Perez-Sebastian, Fidel

Authors

Chris Papageorgiou

Fidel Perez-Sebastian



Abstract

This paper compares transitional dynamics in two alternative R&D non-scale growth models, one with endogenous human capital and the other without. We show that focusing only on the asymptotic speed of convergence to discriminate between the two models' performance can be misleading. Our analysis suggests that a careful study of the entire adjustment paths predicted by alternative growth models starting far away from the balanced-growth path is required in order to successfully discriminate among them.

Citation

Papageorgiou, C., & Perez-Sebastian, F. (2007). Is the asymptotic speed of convergence a good proxy for the transitional growth path?. Journal of Money, Credit and Banking, 39(1), 1-24. https://doi.org/10.1111/j.0022-2879.2007.00001.x

Journal Article Type Review
Acceptance Date Feb 23, 2006
Online Publication Date Jan 18, 2007
Publication Date 2007-02
Deposit Date Nov 4, 2020
Journal Journal of Money, Credit and Banking
Print ISSN 0022-2879
Publisher Wiley
Peer Reviewed Peer Reviewed
Volume 39
Issue 1
Pages 1-24
DOI https://doi.org/10.1111/j.0022-2879.2007.00001.x
Keywords Convergence; Asymptotic speed; Transitional dynamics; R&D growth model; Human capital
Public URL https://hull-repository.worktribe.com/output/3623194
Publisher URL https://onlinelibrary.wiley.com/doi/abs/10.1111/j.0022-2879.2007.00001.x