Manuscript received 4.6.10; final version received 31.10.10.
EQUILIBRIUM DYNAMICS OF AN ENDOGENOUS GROWTH MODEL WITH AN EROSION EFFECT AND DUPLICATION IN R&D*
Article first published online: 12 JUL 2011
© 2011 The Author. The Manchester School © 2011 Blackwell Publishing Ltd and The University of Manchester
The Manchester School
Volume 80, Issue 6, pages 700–717, December 2012
How to Cite
GÓMEZ, M. A. (2012), EQUILIBRIUM DYNAMICS OF AN ENDOGENOUS GROWTH MODEL WITH AN EROSION EFFECT AND DUPLICATION IN R&D. The Manchester School, 80: 700–717. doi: 10.1111/j.1467-9957.2011.02252.x
The author thanks two anonymous referees for helpful comments. Financial support from the Spanish Ministry of Science and Innovation through Grant ECO2008-04180 is gratefully acknowledged.
- Issue published online: 9 OCT 2012
- Article first published online: 12 JUL 2011
This paper devises an endogenous growth model with physical capital accumulation, knowledge formation and R&D, in which technological progress has an erosion effect in human capital, and innovation is subject to externalities associated to the duplication of research effort. We provide conditions for the existence of a unique feasible steady-state equilibrium with positive long-run growth. For appropriate parameter values, the transitional dynamics of the model is represented by a two-dimensional stable manifold. Numerical simulations show that the incorporation of an erosion effect, as well as duplication externalities, significantly increases the ability of the model to fit the observed data.