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| Title: | Bringing Growth Theory "Down to Earth" |
| Authors: | Lopez, Ramon
Stocking, Andrew |
| Authors (Email): | Lopez, Ramon (rlopez@arec.umd.edu)
Stocking, Andrew (astocking@arec.umd.edu) |
| Keywords: | endogenous growth theory
unbalanced growth
structural change
stagnation |
| JEL Codes: | E22
Q01
O41 |
| Issue Date: | 2009 |
| Series/Report no.: | Working Paper
09-01 |
| Abstract: | Explicitly accounting for certain basic physical laws governing the “earth” sector
dramatically enriches our ability to explain a high degree of diversity in observed patterns of
economic growth. We provide a theoretical explanation of why some countries have been able
to sustain a more or less constant and positive rate of economic growth for many decades while
so many others have failed to do so. The analysis predicts that countries that have an over
abundance of physical capital (a concept that is precisely defined in the text) may be unable to
sustain a positive rate of economic growth over the long run. Too much physical capital may
affect the dynamics of the economy ultimately leading to stagnation. The plausibility of the
growth model introduced here is demonstrated by its ability to predict some important stylized
facts for which standard endogenous growth models generally cannot account. |
| URI: | http://purl.umn.edu/48944 |
| Institution/Association: | University of Maryland>Department of Agricultural and Resource Economics>Working Papers |
| Total Pages: | 53 |
| Collections: | Working Papers
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Files in This Item:
| File |
Description |
Size | Format |
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| 09-01.pdf | | 298Kb | PDF | View/Open |
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