A multisectoral general equilibrium model of Schumpeterian growth and fluctuations

Article Abstract:

A dynamic multisectoral general equilibrium model of Schumpeterian growth and fluctuations based on the endogenous introduction of new products, is developed. Technological opportunities affect the degree of product- quality upgrading and are composed of breakthroughs and improvements with the latter exhibiting declining returns. Two symmetrical stable patterns of innovation which produce endogenous cycles and growth are studied. Findings reveal that there is a negative correlation between the length of each cycle and the long-run growth trend.

Economic aspects, Technological innovations, Equilibrium (Economics)

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Increasing returns and crowding out

Article Abstract:

The inhibiting effect of public debt on the accumulation of physical capital when the technology exhibits a production externality of the Arrow-Romer class is analyzed. The conditions in which a small amount of debt can prevent the economy from attaining the stock of capital it would reach if public debt were zero, are examined. Findings reveal that the interaction of debt and production externalities may generate bounded capital stock sequences in economies where sustained growth rates are possible with zero national debt.

Capital market, Capital markets, National debt, Public debts, Crowding out (Economics)

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Variance properties of Solow's productivity residual and their cyclical implications

Article Abstract:

A model is formulated that aims to investigate the internal operation of the perceived Solow residual correlation between growth trends and energy prices. In the US, the correlation is shown to be -0.55(0.09). Endogenous capital use plays a crucial part in the transmission mechanism pertinent to the Solow equation. This model is consonant with business cycle theory as it incorporates variables such as external shocks to business trends.

Research, Business cycles

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