Growth outside the stable path: Lessons from the European reconstruction Export

@article{citeulike:2654072, abstract = {This paper exploits a natural experiment, the large destruction of capital in continental Europe during World War II, to characterize the transitional dynamics of an economy that begins with a capital stock below its steady state level. We use these regularities as a benchmark to discriminate among competing growth specifications. A model that combines non-separabilities in preferences with a technology that restricts the degree of substitutability between inputs outperforms the widely used AK and Cobb-Douglas specifications with time-separable preferences. Our results suggest that policy evaluations based in growth models that overlook non-separabilities in preferences or impose strong restrictions on the technological structure might be grossly misleading.}, author = {Alvarez-Cuadrado, Francisco}, citeulike-article-id = {2654072}, citeulike-linkout-0 = {http://dx.doi.org/10.1016/j.euroecorev.2007.02.003}, citeulike-linkout-1 = {http://www.sciencedirect.com/science/article/B6V64-4NT2535-1/2/915888665eb86b26b5b30d8e2fb359ed}, doi = {10.1016/j.euroecorev.2007.02.003}, journal = {European Economic Review}, keywords = {convergence, growth}, month = {April}, number = {3}, pages = {568--588}, posted-at = {2008-04-11 15:13:13}, priority = {2}, title = {Growth outside the stable path: Lessons from the European reconstruction}, url = {http://dx.doi.org/10.1016/j.euroecorev.2007.02.003}, volume = {52}, year = {2008} }

TY - JOUR ID - citeulike:2654072 L3 - citeulike-article-id:2654072 N2 - This paper exploits a natural experiment, the large destruction of capital in continental Europe during World War II, to characterize the transitional dynamics of an economy that begins with a capital stock below its steady state level. We use these regularities as a benchmark to discriminate among competing growth specifications. A model that combines non-separabilities in preferences with a technology that restricts the degree of substitutability between inputs outperforms the widely used AK and Cobb-Douglas specifications with time-separable preferences. Our results suggest that policy evaluations based in growth models that overlook non-separabilities in preferences or impose strong restrictions on the technological structure might be grossly misleading. IS - 3 JF - European Economic Review EP - 588 TI - Growth outside the stable path: Lessons from the European reconstruction VL - 52 SP - 568 KW - convergence KW - growth AU - Alvarez-Cuadrado, Francisco PY - 2008/04// UR - http://dx.doi.org/10.1016/j.euroecorev.2007.02.003 ER -