Implications of Solow's Growth Model: A Stocastic Approach

Cellini, Roberto (1994) Implications of Solow's Growth Model: A Stocastic Approach. Bologna: Dipartimento di Scienze economiche DSE, p. 29. DOI 10.6092/unibo/amsacta/5132. In: Quaderni - Working Paper DSE (194). ISSN 2282-6483.
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Abstract

The aim of this paper is to analyse Solow's model, introducing the consideration that steady state labour productivity (in efficiency units) and its determinans are not constant values, for a country over a given period of time. They are, in fact, time series with unit roots. First, the paper shows that Solow's model can be interpreted as an error correction model and it could be consistent with the stochastic nature of the variables. Secondly, implications about integration and coinstegration of the relevant series are tested. We use data coming from four countries over the period 1960-88. The error correction mechanism implied by Solow's model never appers to have been operative: convergence of current productivity towards its (stochastic) steady state path does not emerge in any considered case.

Abstract
Document type
Monograph (Working Paper)
Creators
CreatorsAffiliationORCID
Cellini, Roberto
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ISSN
2282-6483
DOI
Deposit date
10 May 2016 08:17
Last modified
11 May 2016 08:20
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