Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
5053728 | Economic Modelling | 2015 | 12 Pages |
Abstract
Previous research has shown a strong positive correlation between short-term persistence and long-term output growth as well as between depreciation rates and long-term output growth. This evidence, therefore, contradicts the standard predictions from traditional neoclassical or AK-type growth models with exogenous depreciation. In this paper, we first confirm these findings for a larger sample of 101 countries. We then study the dynamics of growth and persistence in a model that renders a positive link between embodied technological progress, depreciation and output growth. We find that the model's predictions appear consistent with the empirical evidence on persistence, long-term growth and depreciation rates. In addition, we provide evidence of a unit root in output with a large battery of second-generation panel unit root tests. This supports the general validity of the endogenous growth model proposed.
Keywords
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Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Ilaski Barañano, Diego Romero-Ávila,