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Lin Gui - One of the best experts on this subject based on the ideXlab platform.

  • sustainable Endogenous Growth Model of multiple regions reconciling or and economic perspectives
    European Journal of Operational Research, 2017
    Co-Authors: Ning Zhang, Lin Gui
    Abstract:

    By combining the two-sector Endogenous Growth Model and the dynamic game of remediation (utilization) activities, we propose a theoretical framework to investigate conflict in the sustainable Growth path of multiple regions. We analyze the effects of two types of activities that differ in externalities on other regions’ stock of natural resources. In the case of inclusive remediation with a positive externality, the region that moves firstly will pass all the remediation responsibility to the other region and enjoy faster Growth. However, in the case of exclusive utilization with a negative externality, both regions will experience the same Growth rate, because each region could adopt exclusive utilization and reduce the stock of common resources available to the other region in the next period, which result in a symmetric equilibrium. We also find that regions have a stronger incentive to implement exclusive utilization than inclusive remediation. Although exclusive utilization seems fair to regions, it may deteriorate the social welfare, because regions may fall into a ‘prisoner's dilemma’ by using exclusive utilization. Three extensions of the Model (i.e., increasing number of regions, asymmetric regions, and knowledge as a public capital good) are provided.

Alfred Greiner - One of the best experts on this subject based on the ideXlab platform.

  • Public Debt in a Descriptive Endogenous Growth Model
    SSRN Electronic Journal, 2019
    Co-Authors: Alfred Greiner
    Abstract:

    In this paper we analyze a descriptive Endogenous Growth Model with public debt. The government can run into debt, but, the primary surplus is a positive function of the debt to GDP ratio such that the debt ratio becomes a mean-reverting process. We show that a balanced budget scenario yields a higher long-run Growth rate than a scenario with permanent deficits if and only if the public deficit exceeds the net saving out of government bonds. As regards the dynamics, the analysis shows that multiple balanced Growth paths can arise. Further, reducing the reaction of the primary surplus to a higher public debt can generate Endogenous cycles via a Hopf bifurcation and, for a sufficiently low reaction coefficient, the economy becomes unstable.

  • Fiscal and Monetary Policy in a Basic Endogenous Growth Model
    Computational Economics, 2015
    Co-Authors: Alfred Greiner
    Abstract:

    We present a monetary Endogenous Growth Model and analyse the effects of fiscal and monetary policy with real money as an argument in the utility function. We show that a balanced government budget gives a higher balanced Growth rate and lower inflation than a situation with permanent public deficits. It also leads to higher welfare compared to a situation with permanent deficits when the government does not put a high weight on stabilizing debt. However, when governments run deficits with a high weight on stabilizing debt, comparative welfare effects depend on the initial conditions with respect to public debt. Further, for a given monetary policy a stricter debt policy yields higher Growth, lower inflation and higher welfare. A rise in the nominal money supply can compensate the negative Growth effects of a loose debt policy up to a certain point but only at the cost of higher inflation and lower welfare.

  • public debt and public investment in an Endogenous Growth Model with real wage rigidities
    Scottish Journal of Political Economy, 2010
    Co-Authors: Alfred Greiner, Peter Flaschel
    Abstract:

    We present an Endogenous Growth Model with public capital, public debt and real wage rigidities due to labor market imperfections. Assuming that the primary surplus relative to gross domestic produce (GDP) is a positive function of the debt to GDP ratio, we study Growth and employment effects of deficit-financed public investment using simulations as well as how fiscal policy affects stability of the economy. Further, we contrast the Growth rate and the unemployment rate in the deficit scenario with that of the balanced budget scenario. Finally, we compare our results with those obtained in case of flexible wages and full employment.

  • an Endogenous Growth Model with public capital and sustainable government debt
    The Japanese Economic Review, 2007
    Co-Authors: Alfred Greiner
    Abstract:

    This paper presents and analyses an Endogenous Growth Model with public capital and public debt. It is assumed that the ratio of the primary surplus to gross domestic income is a positive linear function of the debt income ratio which assures that public debt is sustainable. The paper then derives necessary conditions for the existence of a sustainable balanced Growth path for the analytical Model. Further, simulations are undertaken in order to gain insight into stability properties of the Model and in order to analyse Growth effects of deficit financed increases in public investment. The latter is done for the Model on the sustainable balanced Growth path as well as for the Model along the transition path.

  • Estimating an Endogenous Growth Model with Public Capital and Government Borrowing: U.S. and Germany 1960–1995
    Computational Economics, 2004
    Co-Authors: Alfred Greiner, Willi Semmler, Gang Gong
    Abstract:

    The paper presents and estimates an Endogenous Growth Model with publiccapital and government borrowing. Government behavior (tax rates, spending andborrowing) does not follow optimizing rules but is restricted by two fiscalregimes (rules). In the strict fiscal regime government borrowing is used forpublic investment only. In the less strict regime it can also be used forpublic investment and to a certain degree for the debt service. The Growthrate differs in our Model variants according to which rule is adopted.Moreover, the Growth maximizing income tax rate is different from zero. Forthe two relevant fiscal regimes, which correspond roughly to the cases of theU.S. and Germany, the Model is estimated by employing time series data from1960.4 to 1992.1 and 1966.1 to 1995.1 respectively. The results suggest anexplanation for the different time paths of economic variables in the Americanand German economies in the post-war period.

Ning Zhang - One of the best experts on this subject based on the ideXlab platform.

  • sustainable Endogenous Growth Model of multiple regions reconciling or and economic perspectives
    European Journal of Operational Research, 2017
    Co-Authors: Ning Zhang, Lin Gui
    Abstract:

    By combining the two-sector Endogenous Growth Model and the dynamic game of remediation (utilization) activities, we propose a theoretical framework to investigate conflict in the sustainable Growth path of multiple regions. We analyze the effects of two types of activities that differ in externalities on other regions’ stock of natural resources. In the case of inclusive remediation with a positive externality, the region that moves firstly will pass all the remediation responsibility to the other region and enjoy faster Growth. However, in the case of exclusive utilization with a negative externality, both regions will experience the same Growth rate, because each region could adopt exclusive utilization and reduce the stock of common resources available to the other region in the next period, which result in a symmetric equilibrium. We also find that regions have a stronger incentive to implement exclusive utilization than inclusive remediation. Although exclusive utilization seems fair to regions, it may deteriorate the social welfare, because regions may fall into a ‘prisoner's dilemma’ by using exclusive utilization. Three extensions of the Model (i.e., increasing number of regions, asymmetric regions, and knowledge as a public capital good) are provided.

Gilles Saintpaul - One of the best experts on this subject based on the ideXlab platform.

Koichi Futagami - One of the best experts on this subject based on the ideXlab platform.

  • dynamic analysis of reductions in public debt in an Endogenous Growth Model with public capital
    Macroeconomic Dynamics, 2017
    Co-Authors: Noritaka Maebayashi, Takeo Hori, Koichi Futagami
    Abstract:

    We construct an Endogenous Growth Model that includes productive public capital and government debt. We assume that the government debt-to-GDP ratio is gradually adjusted to a target level, reflecting the permanent commitment rules in the Stability and Growth Pact or the Maastricht Treaty in the European Union (i.e., the well-known 60% rule). These rules affect government borrowing and public investment. Here, we examine the welfare implications of the permanent commitment rules. We find that fiscal consolidation based on the rules improves social welfare. Moreover, the improvement in welfare accelerates as fiscal consolidation progresses more rapidly. Last, we also discuss and derive the optimal long-run debt-to-GDP ratio.

  • Dynamic analysis of patent policy in an Endogenous Growth Model
    Journal of Economic Theory, 2007
    Co-Authors: Koichi Futagami, Tatsuro Iwaisako
    Abstract:

    Abstract In this paper, we explore the dynamic properties of an Endogenous Growth Model with finite patent length. We show that there exists a unique equilibrium Growth path and that this path exhibits damped oscillations in contrast to the equilibrium path of an Endogenous Growth Model with infinite patent length. We also examine the effects of patent policy on social welfare and show that infinite patent length does not maximize social welfare. Furthermore, we show that, in a Growth Model that does not exhibit scale effects, a finite patent length maximizes social welfare on the balanced Growth path.

  • Patent Policy in an Endogenous Growth Model
    Journal of Economics, 2003
    Co-Authors: Tatsuro Iwaisako, Koichi Futagami
    Abstract:

    We investigate how the patent policy affects economic Growth and social welfare based on an Endogenous Growth Model with R&D activities. We show that the patent length that maximizes the social welfare is finite. Moreover, by introducing compulsory licensing, we also show that the patent length that maximizes the social welfare is not infinite even if the royalty rate can be controlled.

  • Growth Effects of Bubbles in an Endogenous Growth Model
    The Japanese Economic Review, 2000
    Co-Authors: Koichi Futagami, Akihisa Shibata
    Abstract:

    This paper examines the possibility of the existence of bubbles and their effects on the Growth rate by using an Endogenous Growth Model. A necessary and sufficient condition for the existence of steady-state equilibrium with bubbles is provided. If non-zero rates of the useless asset supply are allowed, a steady-state equilibrium with bubbles exists even if the Growth rate of the bubbleless equilibrium is lower than the market interest rate. The Growth rate in the steady state with bubbles depends positively on the supply rate of the useless asset. Dynamic properties of bubbles are also analysed.

  • Welfare effects of bubbles in an Endogenous Growth Model
    Research in Economics, 1999
    Co-Authors: Koichi Futagami, Akihisa Shibata
    Abstract:

    Abstract This paper examines welfare effects of asset bubbles in an Endogenous Growth Model with overlapping generations. In our Model, a steady-state equilibrium with bubbles exists only if the presence of bubbles raises the welfare level of the initial generation. Bubbles can be beneficial to generations born at relatively early dates, whereas they reduce the welfare level of sufficiently distant future generations. Increasing the rate of supply of the useless asset improves the lifetime utilities of future generations.