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Title:On growth and fluctuations
Author(s):Uribe, Jose Dario
Doctoral Committee Chair(s):Rashid, Salim
Department / Program:Economics
Degree Granting Institution:University of Illinois at Urbana-Champaign
Subject(s):Economics, General
Abstract:The purpose of this Thesis is to extend the recent literature on economic growth and to provide some elements for an integrated approach to the analysis of growth and fluctuations.
The Thesis is organized in four chapters. Chapter 1 reviews recent growth models. Chapter 2 extends the growth literature in a direction that can address the growth problem of developing countries. Following Frankel (1962) and Romer (1986), we postulate an individual production function linking output to "private" and "social" factors of production. The social factor of production represents all the externalities that stem from conglomeration of economic activity and from investment in infrastructure. These externalities are, we argue, large enough to produce multiple, locally stable balanced growth in equilibrium. A simple growth model with these properties is presented.
In Chapter 3 we examine the cross-section behavior of growth rates to see in what extent the data are supportive of our theory. We find that groups of countries obey different production functions. We also include a proxy for physical infrastructure as an additional regressor in the equations of each sub-sample and find several far reaching results. In particular, we find that countries in their growth process face two types of "thresholds": the first type is faced at a relatively low level of economic development and connects growth to human capital. The second "threshold" is the one we emphasized in chapter 2, connecting economic growth to physical infrastructure.
Finally, in chapter 4 we assess what we have learned about the relationship between growth and fluctuations. We present a review of both the real business cycle theory and the debate over the statistical properties of output. We also claim that monetary models are as capable as real models in generating a highly persistent process of growth. We survey models with this idea and present new motives for believing that monetary shocks may have a permanent effect on output. We conclude by explaining why in a world with endogenous technology, economic impulses driving growth and cycles may come from the same origin and may render the distinction meaningless.
Issue Date:1993
Rights Information:Copyright 1993 Uribe, Jose Dario
Date Available in IDEALS:2011-05-07
Identifier in Online Catalog:AAI9314953
OCLC Identifier:(UMI)AAI9314953

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