On Endogenous Growth Under Uncertainty

This paper incorporates uncertainty in two distinct models of endogenous growth. In both models the representative agent is uncertain about the productivity of knowledge creation, as represented by a probability measure over the relevant parameter. The main purpose of this paper is to analyze the ef...

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Bibliographic Details
Published in:International economic review (Philadelphia) 1999-08, Vol.40 (3), p.727-744
Main Author: De Hek, Paul A.
Format: Article
Language:English
Subjects:
Capital accumulation
Economic growth models
Economic growth rate
Economic models
Economic uncertainty
Endogenous growth
Growth models
Growth rates
Human capital
Human growth
Investment
Investment policy
Knowledge
Long run economic growth
Marginal utility
Productivity
Studies
Uncertainty
Utility functions
Volatility
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Summary:This paper incorporates uncertainty in two distinct models of endogenous growth. In both models the representative agent is uncertain about the productivity of knowledge creation, as represented by a probability measure over the relevant parameter. The main purpose of this paper is to analyze the effects of risk or volatility in productivity of knowledge creation on the decision variables and the expected long-run growth rate. Both the first and the second models may explain part of the observed negative link between volatility and growth.
ISSN:0020-6598
1468-2354
DOI:10.1111/1468-2354.00037