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Chong K Yip - One of the best experts on this subject based on the ideXlab platform.
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a general two sector model of endogenous growth with human and Physical Capital balanced growth and transitional dynamics
Journal of Economic Theory, 1996Co-Authors: Eric W Bond, Ping Wang, Chong K YipAbstract:Abstract We examine a two-sector endogenous growth model with general constant-return-to-scale production technologies governing the evolution of human and Physical Capital. We prove the existence, uniqueness, and saddle-path stability of the balanced growth equilibrium. A dual approach drawing on techniques from international trade theory is used to provide complete characterization of the transitional dynamics of consumption, goods and education outputs, human and Physical Capital inputs, and the relative price of human Capital investment. We investigate the long-run effects of changes in time preference and factor taxation, and show the emergence of instability or indeterminacy when factor taxes are too distortionary.Journal of Economic LiteratureClassification Number: D90.
Agustín Pérez-barahona - One of the best experts on this subject based on the ideXlab platform.
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Energy and Physical Capital: A Case of Non-classical Dynamics
Environmental and Resource Economics, 2018Co-Authors: Burcu Fazlıoğlu, Agustín Pérez-barahona, Cagri SaglamAbstract:We study the importance of considering different energy requirements for Physical Capital and final good production in an overlapping generations (OLG) resource economy. In contrast to the standard OLG framework, but consistently with the empirical evidence, we assume that the accumulation of Physical Capital requires more energy than the production of consumption goods. Focusing on exhaustible energy resources, we find that OLG equilibria can exhibit “non-classical dynamics”: the economy generates complex dynamics where, differing from the response predicted by the standard approach, resource prices may not increase monotonically. This result illustrates that the technological assumptions behind the energy inputs should be taken with caution, in particular on dynamic analyses involving exhaustible energy resources.
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Non-renewable energy resources as input for Physical Capital accumulation: a new approach
Macroeconomic Dynamics, 2011Co-Authors: Agustín Pérez-barahonaAbstract:In contrast to the standard approach in energy economics, this paper assumes that Physical Capital accumulation is relatively more energy-intensive than consumption. By means of Gaussian hypergeometric functions, we provide a closed-form representation of the optimal solution paths of our variables in levels, whatever the initial conditions (i.e., global dynamics). We find that, in general, the optimal trajectories are non-monotonic. P.S. Dasgupta and G.M. Heal [Review of Economic Studies (special number), 3-28 (1974)] pointed out this result (local dynamics) for the optimal consumption in a model with identical technology for both Physical Capital accumulation and consumption. However, our paper introduces five novelties with respect to their study, namely, global dynamics, the importance of the proportion of non-renewable energy resources to endowment of Physical Capital [S(0)/K(0)], the role of technical progress, U-shaped behaviour of consumption, and non-monotonicity of resource extraction.
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NONRENEWABLE ENERGY RESOURCES AS INPUT FOR Physical Capital ACCUMULATION: A NEW APPROACH
Macroeconomic Dynamics, 2010Co-Authors: Agustín Pérez-barahonaAbstract:In contrast to the standard approach in energy economics, this paper assumes that Physical Capital accumulation is relatively more energy-intensive than consumption. By means of Gaussian hypergeometric functions, we provide a closed-form representation of the optimal solution paths of our variables in levels, whatever the initial conditions (i.e., global dynamics). We find that, in general, the optimal trajectories are nonmonotonic. P.S. Dasgupta and G.M. Heal [Review of Economic Studies (special number), 3–28 (1974)] pointed out this result (local dynamics) for the optimal consumption in a model with identical technology for both Physical Capital accumulation and consumption. However, our paper introduces five novelties with respect to their study, namely, global dynamics, the importance of the proportion of nonrenewable energy resources to endowment of Physical Capital [S(0)/K(0)], the role of technical progress, U-shaped behavior of consumption, and nonmonotonicity of resource extraction.
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The problem of non-renewable energy resources in the production of Physical Capital
SSRN Electronic Journal, 2007Co-Authors: Agustín Pérez-barahonaAbstract:This paper studies the possibilities of technical progress to deal with the growth limit problem imposed by the usage of non-renewable energy resources, when Physical Capital production is relatively more energy-intensive than consumption. In particular, this work presents the conditions under which energy-saving technologies can sustain long-run growth, although energy is produced by means of non-renewable energy resources. The mechanism behind that is energy efficiency.
Cuong Le Van - One of the best experts on this subject based on the ideXlab platform.
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Growth strategy with social Capital, human Capital and Physical Capital - theory and evidence: the case of Vietnam
Journal of Public Economic Theory, 2018Co-Authors: Cuong Le Van, Anh Ngoc Nguyen, Ngoc-minh Nguyen, Michel SimioniAbstract:In this paper, we develop a theoretical model to explain the impact of social Capital (defined at the firm level) on individual firm performance and derive a critical optimal threshold for firms to invest in social Capital. The theoretical model we propose reveals how social Capital, human Capital, and Physical Capital simultaneously affect firm performance under the main assumption of a decreasing function of social Capital on unit cost of Physical Capital. Our theoretical model is then estimated using unique firm-level longitudinal data from Vietnam for the period 2005–2015. Using a control function approach in a quantile regression framework, we attempt to establish the causal impact of social Capital on firm performance. Our empirical results point to a range of revenue in which investment in social Capital is efficient and to evidence suggesting that the role of social Capital decreases when firms become richer.
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Intertemporal equilibrium with financial asset and Physical Capital
Economic Theory, 2015Co-Authors: Cuong Le Van, Ngoc-sang PhamAbstract:International audienceWe build an infinite-horizon dynamic deterministic general equilibrium model with imperfect markets (borrowing constraints), in which heterogeneous agents invest in Capital or/and financial asset and consume. There is a representative firm which maximizes its profit. Firstly, the existence of intertemporal equilibrium is proved even if aggregate Capital is not uniformly bounded. Secondly, we study the interaction between the financial market and the productive sector. We also explore the nature of Physical Capital bubble and financial asset bubble as well
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Intertemporal equilibrium with financial asset and Physical Capital
Economic Theory, 2015Co-Authors: Cuong Le Van, Ngoc-sang PhamAbstract:We build an infinite-horizon dynamic deterministic general equilibrium model with imperfect markets (borrowing constraints), in which heterogeneous agents invest in Capital or/and financial asset and consume. There is a representative firm which maximizes its profit. Firstly, the existence of intertemporal equilibrium is proved even if aggregate Capital is not uniformly bounded. Secondly, we study the interaction between the financial market and the productive sector. We also explore the nature of Physical Capital bubble and financial asset bubble as well.
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Intertemporal equilibrium with financial asset and Physical Capital
2014Co-Authors: Cuong Le Van, Ngoc-sang PhamAbstract:We build an infinite-horizon dynamic deterministic general equilibrium model with imperfect markets (because of borrowing constraints), in which heterogeneous agents invest in Capital or/and financial asset, and consume. There is a representative firm who maximizes its profit. Firstly, the existence of intertemporal equilibrium is proved even if aggregate Capital is not uniformly bounded. Secondly, we study the interaction between the financial market and the productive sector. We also explore the nature of Physical Capital bubble and financial asset bubble as well.
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Growth Strategy with social Capital and Physical Capital- Theory and Evidence: the Case of Vietnam
2014Co-Authors: Cuong Le Van, Anh Ngoc Nguyen, Ngoc-minh NguyenAbstract:We study the impact of social Capital in both simple theoretical and empirical model with the main assumption is the price of Physical Capital is a decreasing function of social Capital. In our theoretical model, there exists a critical value such that firm will not invest in social Capital if its saving is lower than the critical value and otherwise. Moreover, the output depends positively and non-linearly on the social Capital. Our empirical model that captures the impact of Physical Capital, human Capital, and social Capital using the database from Survey of Small and Medium Scale Manufacturing Enterprises (SMEs) in Vietnam 2011, confirms the conclusions of the theoretical model.
Maciej Malaczewski - One of the best experts on this subject based on the ideXlab platform.
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Substitutes or complements? Relationship between natural resources and Physical Capital – a few stylised facts
Economic Research-Ekonomska Istraživanja, 2019Co-Authors: Maciej MalaczewskiAbstract:This paper considers the complementarity and substitutability of natural resources and Physical Capital. Unlike existing empirical research, concentrated on the estimation of the elasticity of subs...
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Complementarity between energy and Physical Capital in a simple model of economic growth
Economic Research-Ekonomska Istraživanja, 2018Co-Authors: Maciej MalaczewskiAbstract:AbstractEnergy is one of the most important factors of growth, needed to power Physical Capital. This implies complementarity between these two factors, but in most theoretical papers, substitutability is assumed. In this paper, the main question is if complementarity between energy and Physical Capital hampers balanced growth or not. In order to answer this question, we consider the simple economic growth model with two sectors – output production and energy production – where energy is complementary to Physical Capital. Two forms of Capital – Physical and human – are distributed in this model between two sectors to maximise output. We consider the equilibrium state of this model, analyse comparative statics and derive necessary conditions for balanced growth. We also analyse some of the effects of technological progress. The analysis brings us to the conclusion that, in general, it leads to an increase in output, but that changes in technology of production have an ambiguous influence on output. We also...
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Physical Capital, Production of the Energy and Time of Natural Resources’ Exhaustion
Przegląd Statystyczny, 2016Co-Authors: Maciej MalaczewskiAbstract:The aim of this paper is to analyze long-run economic growth of the economy endowed with natural resources. In the model we assume that natural resources are the main source of the energy necessary to power Physical Capital. We also assume existence of second type of Physical Capital that does not need energy. We consider optimal consumption per capita – maximizing behaviour of the economy, and also analyze the time of exhaustion of natural resources.
Amitrajeet A. Batabyal - One of the best experts on this subject based on the ideXlab platform.
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Increasing Returns in a Model With Creative and Physical Capital: Does a Balanced Growth Path Exist?
Regional Science Inquiry, 2016Co-Authors: Amitrajeet A. BatabyalAbstract:In this note we study aspects of economic growth in a region that produces a final consumption good with creative and Physical Capital. This consumption good is manufactured with a production function that exhibits increasing returns to scale. Our analysis leads to three results. First, we compute the growth rate of creative Capital in our regional economy. Second, we show that despite the presence of increasing returns, the regional economy under study converges to a balanced growth path (BGP). Finally, we compute the growth rates of Physical Capital and output on the BGP.
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Physical Capital Mobility, the Educational and Quality Aspects of Creative Capital, and Output Production
SSRN Electronic Journal, 2016Co-Authors: Alden Porter, Amitrajeet A. BatabyalAbstract:We analyze two theoretical models of the connections between Physical Capital mobility, education in and the quality of creative Capital, and the production of output in a region that is creative in the sense of Richard Florida. Our first model focuses on a single region which produces a knowledge good with perfectly mobile Physical Capital. We trace through the effect that education has in converting raw creative Capital into acquired creative Capital and then study how Physical Capital mobility affects the impact of the change in education on the output of the knowledge good. Our second model is similar to the first one but the focus now is on two creative regions and on the quality of creative Capital. We show how to decompose the difference in the logarithm of the output of the knowledge good per raw creative Capital unit between the two regions into the contributions of education and all other factors.
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goods production learning by doing and growth in a region with creative and Physical Capital
International Review of Economics & Finance, 2014Co-Authors: Umer Usman, Amitrajeet A. BatabyalAbstract:We study the effects of learning by doing resulting from the production of a final good on economic growth in a region that is creative in the sense of Richard Florida. Firms in this region use creative and Physical Capital to produce output. We model learning by doing formally and our analysis of the working of this creative region leads to four results. First, we derive analytic expressions for the growth rates of Physical Capital and technology. Second, we draw phase diagrams and show that in the steady state, the preceding two growth rates must be equal. Third, we show that the economy of our creative region converges to a balanced growth path (BGP) in which the growth rates of Physical Capital, technology, and the output of the final good are identical. Finally, we investigate the impact that an increase in the savings rate has on the economic growth of our creative region in the long run.
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Goods production, learning by doing, and growth in a region with creative and Physical Capital ☆
SSRN Electronic Journal, 2014Co-Authors: Umer Usman, Amitrajeet A. BatabyalAbstract:We study the effects of learning by doing resulting from the production of a final good on economic growth in a region that is creative in the sense of Richard Florida. Firms in this region use creative and Physical Capital to produce output. We model learning by doing formally and our analysis of the working of this creative region leads to four results. First, we derive analytic expressions for the growth rates of Physical Capital and technology. Second, we draw phase diagrams and show that in the steady state, the preceding two growth rates must be equal. Third, we show that the economy of our creative region converges to a balanced growth path (BGP) in which the growth rates of Physical Capital, technology, and the output of the final good are identical. Finally, we investigate the impact that an increase in the savings rate has on the economic growth of our creative region in the long run.
