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Nonlinear Dynamics, Spillovers and Growth in the G7 Economies: An Empirical Investigation
Author(s) -
Sarno Lucio
Publication year - 2001
Publication title -
economica
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.532
H-Index - 65
eISSN - 1468-0335
pISSN - 0013-0427
DOI - 10.1111/1468-0335.00253
Subject(s) - disequilibrium , economics , spillover effect , nonlinear system , econometrics , function (biology) , production (economics) , productivity , logistic function , empirical research , macroeconomics , mathematics , statistics , medicine , physics , quantum mechanics , evolutionary biology , biology , ophthalmology
This paper proposes an empirical growth model which is consistent with a stochastic steady‐state labour productivity level varying over time and across countries, where the disequilibrium mechanism leading to long‐run equilibrium follows a nonlinear equilibrium correction model. Using data for the G7 economies during the postwar period since 1950, the empirical analysis yields a long‐run model which implies plausible estimates of the production function parameters. Postwar economic growth in each of the G7 countries appears to be well characterized by a nonlinear equilibrium correction model where the dynamic adjustment towards long‐run equilibrium is governed by a logistic function, while also capturing spillover effects in growth dynamics.