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

Papageorgiou, Chris; Perez-Sebastian, Fidel

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
• Electronic ISSN: 1538-4616
• 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