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Is the Asymptotic Speed of Convergence a Good Proxy for the Transitional Growth Path?
Author(s) -
PAPAGEORGIOU CHRIS,
PEREZSEBASTIAN FIDEL
Publication year - 2007
Publication title -
journal of money, credit and banking
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.763
H-Index - 108
eISSN - 1538-4616
pISSN - 0022-2879
DOI - 10.1111/j.0022-2879.2007.00001.x
Subject(s) - convergence (economics) , path (computing) , proxy (statistics) , growth model , endogenous growth theory , econometrics , mathematics , human capital , computer science , economics , mathematical economics , statistics , macroeconomics , programming language , economic growth
This paper compares transitional dynamics in two alternative R&D non‐scale growth models, one with endogenous human capital and the other without. We show that focusing only on the asymptotic speed of convergence to discriminate between the two models' performance can be misleading. Our analysis suggests that a careful study of the entire adjustment paths predicted by alternative growth models starting far away from the balanced‐growth path is required in order to successfully discriminate among them.