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 language | English |
|---|---|
| Pages (from-to) | 751-762 |
| Number of pages | 12 |
| Journal | Economic Theory |
| Volume | 25 |
| Issue number | 3 |
| DOIs | |
| Publication status | Published - 2005 Apr 1 |
| Externally published | Yes |
Keywords
- Endogenous growth
- Growth cycles
- Investment gestation lags
- Overlapping generations
ASJC Scopus subject areas
- Economics and Econometrics
Fingerprint Dive into the research topics of 'Endogenous growth cycles in an overlapping generations model with investment gestation lags'. Together they form a unique fingerprint.
Cite this
Kitagawa, A., & Shibata, A. (2005). Endogenous growth cycles in an overlapping generations model with investment gestation lags. Economic Theory, 25(3), 751-762. https://doi.org/10.1007/s00199-003-0458-0