Endogenous growth cycles in an overlapping generations model with investment gestation lags

Akiomi Kitagawa, Akihisa Shibata

Research output: Contribution to journalArticle

7 Citations (Scopus)

Abstract

A simple overlapping generations model with investment gestation lags is constructed. The model shows that, if the technology is of the AK type with capital-deepening externalities, the existence of investment gestation lags always generates permanent cyclical fluctuations in the economic growth rate. The mean growth rate is shown to be positive if the external effect is strong. The model also shows that, if the production technology takes the Cobb-Douglas form, there exists a unique steady state in which the economy exhibits neither cyclical fluctuations nor long-run growth.

Original languageEnglish
Pages (from-to)751-762
Number of pages12
JournalEconomic Theory
Volume25
Issue number3
DOIs
Publication statusPublished - 2005 Apr 1
Externally publishedYes

Keywords

  • Endogenous growth
  • Growth cycles
  • Investment gestation lags
  • Overlapping generations

ASJC Scopus subject areas

  • Economics and Econometrics

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