This paper quantifies the contributions of sectoral productivity growth and structural change to aggregate productivity convergence. Existing evidence is inconclusive because it focuses on convergence within sector and its methodology depends sensitively on the conversion factor used to compare sectoral productivity levels across countries. Thus, a methodology – β-decomposition – is proposed to...

A growth model is developed for an open dual economy. Th e economy expands due to a higher growth rate of labour productivity in the modern sector through the Kaldor-Verdoorn channel and higher eff ective demand through a Keynesian channel. Th e model incorporates a retardation mechanism aff ecting the slopes of productivity and output growth schedules as labour surplus and economies of scale d...

This paper considers a neoclassical optimal growth problem where the shock that perturbs the economy in each time period is potentially unbounded on the state space. Sufficient conditions for existence, uniqueness and stability of equilibria are derived in terms of the primitives of the model using recent techniques from the field of perturbed dynamical systems. Journal of Economic Literature C...

We analyze recent contributions to growth theory based on the model of expanding variety of Romer (1990). In the first part, we present different versions of the benchmark linear model with imperfect competition. These include the “labequipment” model, “labor-for-intermediates” and “directed technical change”. We review applications of the expanding variety framework to the analysis of internat...

I examine the e¤ect of age-distribution of the society on economic growth through technological progress. I build a multisector economy model that involves population pyramid. I characterize the steady-state of the model for low and high population growth rate. Higher population growth rate yields faster TFP and output growth in the long-run. I analyze dynamic behavior of the economy. I calibra...

We analyze the e ect of constant debt policy on capital accumulation and provide an in depth treatment of the dynamics in the economy of Diamond. We derive the conditions for avoiding debt crisis in both the short-run and the long-run and provide geometrical tools to analyze the issue of sustainability. There is always a level of debt ensuring that any level of capital between 0 and an upper li...

This paper provides an overview of the basic concepts of intertemporal equilibrium theory, and discusses the frameworks and techniques used in this subject. It then goes on to introduce the main themes discussed in the papers included in this symposium issue. Journal of Economic Literature Classification Numbers: C61, D90, O41. 2001 Academic Press

Traditionally, economic growth and business cycles have been treated independently. However, the dependence of GDP levels on its history shocks, what economists refer to as “hysteresis,” argues for unifying analysis cycles. In this paper, we review recent empirical theoretical literature that motivates paradigm shift. The renewed interest in hysteresis (or “scarring” parlance) has sparked by pe...