DP592 On the Many Kinds of Growth
|Author(s):||Zvi Eckstein, Costas Foulides, Tryphon Kollintzas|
|Publication Date:||December 1991|
|Keyword(s):||Endogenous Growth, Exogenous Growth, Recursive Competitive Equilibrium, Social Optimum|
|JEL(s):||C62, H21, O41|
|Programme Areas:||International Macroeconomics|
|Link to this Page:||cepr.org/active/publications/discussion_papers/dp.php?dpno=592|
In this paper we synthesize exogenous and endogenous sources of economic growth in a stochastic dynamic general equilibrium model. Endogenous growth can be engendered by internal constant returns to scale or by external increasing returns to scale in the production of human capital or in the production of goods. We provide existence and characterization results for a recursive competitive equilibrium. We show how the different sources of growth combine to generate a plethora of potential growth patterns. Of special interest are the possibilities of steady-state exogenous growth with transitional dynamics dictated by endogenous growth and vice versa. We also characterize the social optimum and a tax-subsidy scheme that supports the social optimum as a recursive competitive equilibrium.