Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/86493
Authors: 
de Hek, Paul A.
Year of Publication: 
2005
Series/Report no.: 
Tinbergen Institute Discussion Paper 05-033/2
Abstract: 
The analysis in this paper shows that unpredictable variations in economic productivity may have a positive or negative effect on the average growth rate of output. This theoretical ambiguity result is not solely determined by the value of the elasticity of intertemporal substitution (of consumption) - as is the case in earlier analyses - but depends on two factors. That is, the growth-uncertainty relationship depends on whether returns to scale in knowledge creation are increasing or non-increasing and whether the elasticity of intertemporal substitution (of profits) is higher or lower than some critical value. Empirical studies concerning these two factors indicate that unpredictable variations in economic productivity have a negative effect on the average long-run growth rate.
Subjects: 
Long-run growth
Technological change
Uncertainty
JEL: 
O3
Document Type: 
Working Paper

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