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Growth Volatility and Technical Progress: A Simple Rent-seeking Model

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Abstract

Recent empirical evidence demonstrates that a higher level of technical progress is associated with a lower level of growth volatility and higher expected economic growth. This paper builds a simple growth model which combines the insights of Angeletos and Kollintzas (2000) and Tse (2000; 2001; 2002) with endogenous productivity growth and rent-seeking behavior to account for these stylized facts. Our model complements the literature that focuses on the heterogeneity of different agents.

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Authors and Affiliations

  1. Department of Economics, The Chinese University of Hong Kong, Shatin, NT, Hong Kong

    Charles Ka Yui Leung

  2. Department of Economics, The University of Western Australia, 35 Stirling Highway, Crawley, WA, 6009, Australia

    Sam Hak Kan Tang & Nicolaas Groenewold

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  1. Charles Ka Yui Leung
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  2. Sam Hak Kan Tang
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  3. Nicolaas Groenewold
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Correspondence to Charles Ka Yui Leung.

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Leung, C.K.Y., Tang, S.H.K. & Groenewold, N. Growth Volatility and Technical Progress: A Simple Rent-seeking Model. J Econ 88, 159–178 (2006). https://doi.org/10.1007/s00712-005-0162-6

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  • DOI: https://doi.org/10.1007/s00712-005-0162-6

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