We thank two anonymous referees, Craig Burnside, John Duffy, Jordi Caballe, Theo Eicher, Lutz Hendricks, Robert King, Sharon Kozicki, Peter Klenow, Kazuo Mino, Pietro Peretto, Jordan Rappaport, Tomoya Sakagami, Robert Solow, Jerry Thursby, Steve Turnovsky, Chang Yonsung, John Williams, and seminar participants in many universities and conferences for their comments and suggestions. Financial support from the European Commission (FEDER funds), the Spanish Ministry of Science and Technology (SEJ2004-08011ECON), and the Instituto Valenciano de Investigaciones Económicas is gratefully acknowledged. The views expressed in this study are the sole responsibility of the authors and should not be attributed to the International Monetary Fund, its Executive Board, or its management.
Is the Asymptotic Speed of Convergence a Good Proxy for the Transitional Growth Path?
Article first published online: 18 JAN 2007
Journal of Money, Credit and Banking
Volume 39, Issue 1, pages 1–24, February 2007
How to Cite
PAPAGEORGIOU, C. and PEREZ-SEBASTIAN, F. (2007), Is the Asymptotic Speed of Convergence a Good Proxy for the Transitional Growth Path?. Journal of Money, Credit and Banking, 39: 1–24. doi: 10.1111/j.0022-2879.2007.00001.x
- Issue published online: 18 JAN 2007
- Article first published online: 18 JAN 2007
- Received June 27, 2005; and accepted in revised form February 23, 2006.
- asymptotic speed;
- transitional dynamics;
- R&D growth model;
- human capital
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.