Ciência-IUL
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Publication Detailed Description
Journal Title
Economic Modelling
Year (definitive publication)
2009
Language
English
Country
Netherlands
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Abstract
A local dynamic analysis, in the neighborhood of the steady state, is developed for one and two-sector endogenous growth models. The problem differs from the conventionally assumed growth setups because one considers that expectations concerning the next period value of the control variable (consumption) are formed through adaptive learning. In such scenario, the found stability conditions reveal that convergence to the unique steady state point is feasible if a minimum requirement regarding the quality of learning in the long run equilibrium is fulfilled. Therefore, stability of growth under learning is dependent on the efficiency with which expectations are generated.
Acknowledgements
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Keywords
Adaptive learning; Endogenous growth; Stability analysis
Fields of Science and Technology Classification
- Economics and Business - Social Sciences