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Descrição Detalhada da Publicação
On the stability of endogenous growth models: an evaluation of the agents' response to output fluctuations
Título Revista
Journal of Economic Studies
Ano (publicação definitiva)
2009
Língua
Inglês
País
Reino Unido
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Abstract/Resumo
Purpose - The purpose of this paper is to present three modified versions of the simple AK endogenous growth model. Design/methodology/approach - Such frameworks stress the role of consumers' sentiment, the impact of fiscal policy and the effect of non-optimal investment decisions made by firms. In all the cases, today's decisions take into consideration the economic performance of the previous period; in the first case, households react pro-cyclically to the output path; in the second case, a counter-cyclical fiscal policy is considered; and in the third case, firms adopt a pro-cyclical behavior concerning investment choices. Findings - The author studies the stability properties of the three models and concludes that, on each one of them, a saddle-path stable equilibrium exists. Originality/value - The paper accentuates the relevance of the reaction of the economic agents relatively to the business cycle. By assuming that the behavior of consumers, government and firms is a behavior of reaction to economic fluctuations, we find interesting and relevant results in what concerns the conventional intertemporal optimization growth model.
Agradecimentos/Acknowledgements
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Palavras-chave
Consumer behaviour,Fiscal policy,Investments
Classificação Fields of Science and Technology
- Economia e Gestão - Ciências Sociais
Registos de financiamentos
Referência de financiamento | Entidade Financiadora |
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POCT/ECO/48628/2002 | Fundação para a Ciência e a Tecnologia |