Adjustment Costs in a Two-Capital Growth Model

CERGE-EI Working Paper No. 144

25 Pages Posted: 13 Mar 2000

See all articles by Petr Duczynski

Petr Duczynski

Charles University in Prague - CERGE-EI, a joint workplace of Charles University and the Economics Institute of the Czech Academy of Sciences

Multiple version iconThere are 2 versions of this paper

Date Written: May 1999

Abstract

The paper analyzes the convergence dynamics of a log-linearized open-economy neoclassical growth model under the assumptions of large adjustment costs for human capital investment, moderate adjustment costs for physical capital investment, and perfect capital mobility. The model can be calibrated for sufficiently slow conditional convergence. The model's dynamics turn out to be richer than the dynamics of the basic neoclassical model due to the imbalance effect between human and physical capital.

JEL Classification: E10, E30

Suggested Citation

Duczynski, Petr, Adjustment Costs in a Two-Capital Growth Model (May 1999). CERGE-EI Working Paper No. 144, Available at SSRN: https://ssrn.com/abstract=182752 or http://dx.doi.org/10.2139/ssrn.182752

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Charles University in Prague - CERGE-EI, a joint workplace of Charles University and the Economics Institute of the Czech Academy of Sciences ( email )

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