The Neo-Schumpeterian Growth Model with the Capital Market
DOI:
https://doi.org/10.18559/SOEP.2016.3.3Keywords:
Endogenous growth, Macroeconomics, Capital market, Economy dynamics, MicroeconomicsAbstract
The purpose of this article is to answer the four questions: what is the dynamic equilibrium between the nominal sphere (capital market) and the real sphere (production, innovation, technological progress) of the economy? How do the maturity and liquidity of the capital market influence long-term growth? What is the impact of the relative risk aversion of investors on the process of innovation? How does long-term volatility in the capital market influences economic growth? To answer these questions we have built the model of growth of the the capital market. It extends the Aghion and Howitt model [2009], which belongs to the group of neo-Schumpeterian models. It is an endogenous growth model in which the rate of growth depends on technological progress that results from innovations implemented in the economy in a random manner. Based on that model, after calibration of its parameters, we have presented the results of the application of the Monte Carlo method to the simulation of an economy's dynamics on both microeconomic and macroeconomic levels.
Downloads
References
Aghion, P. Banerjee, A., 2005, Volatility and Growth, Oxford University Press, DOI:10.1093/acprof:oso/9780199248612.001.0001.
View in Google Scholar
Aghion, P., Howitt, P., 1992, A Model of Growth Through Creative Destruction, Econometrica, vol. 60, nr 2, pp. 323-351, DOI: 10.2307/2951599.
View in Google Scholar
Aghion, P., Howitt, P., 1998, Endogenous Growth Theory, The MIT Press, London, DOI: 10.1080/08109029908629552.
View in Google Scholar
Aghion, P., Howitt, P., 2009, The Economics of Growth, The MIT Press, London.
View in Google Scholar
Aghion, P., Howitt, P., Mayer-Foulkes D., 2004.The Effect of Financial Development on Convergence: Theory and Evidence, NBER Working Paper, no. 10358, DOI: 10.3386/w10358.
View in Google Scholar
Arestis, P., Demetriades, P., 1997, Financial Development and Economic Growth: Assessing the Evidence, The Economic Journal, vol. 107, no. 442, pp. 783-799, DOI: 10.1111/1468-0297.00193.
View in Google Scholar
Arestis, P., Demetriades, P., Luintel, K.B., 2001, Financial Development and Economic Growth: The Role of Stock Markets, Journal of Money, vol. 33, no. 1, pp. 16-41, DOI: 10.2307/2673870.
View in Google Scholar
Artus, P., 2010, Total Factor Productivity: a Reflection of Innovation Drive and Improvement in Human Capital (Education), NATIXIS, Special Reports. Economic Research, no. 41, 5 February.
View in Google Scholar
Beck, T., Levine, R., 2004, Stock Markets, Banks and Growth: Panel Evidence, Journal of Banking and Finance 28, pp. 423-442, DOI: 10.1016/s0378-4266(02)00408-9.
View in Google Scholar
Beck, T., Levine, R., Loayza, N., 2000, Finance and the Sources of Growth, Journal of Financial Economics 58, pp. 261-300, DOI: 10.1016/s0304-405x(00)00072-6.
View in Google Scholar
Burzyński, M., Malaga, K., (2011), Neoschumterowski model wzrostu z rynkiem kapitałowym, Gospodarka Narodowa, nr 11-12, pp. 1-29, SGH, Warszawa.
View in Google Scholar
Malaga, K., 2011, The Main Strands and Dilemmas of Contemporary Economic Growth Theory, Argumenta Oeconomica 2011 nr 1 (26), pp. 2-26, Wrocław University of Economics, Wrocław.
View in Google Scholar
Schumpeter, J.A., 1939, Business Cycles, McGraw-Hill, New York.
View in Google Scholar
Schumpeter, J.A., 1995, Kapitalizm. Socjalizm. Demokracj, Wydawnictwo Naukowe PWN, Warszawa.
View in Google Scholar
Schumpeter, J.A., 1960, Teoria rozwoju gospodarczego, PWN, Warszawa.
View in Google Scholar
Stiglitz, J.E., 2000, Capital Market Liberalization, Economic Growth, and Instability, World Development vol. 28, no. 6, pp. 1075-1086, DOI: 10.1016/s0305-750x(00)00006-1.
View in Google Scholar
