Cyclically Balanced Growth Paths in a Model of Economic Growth with Endogenous Policy Switching

29 Pages Posted: 17 Nov 2015

See all articles by Andrei Akhremenko

Andrei Akhremenko

National Research University Higher School of Economics

Alexander Petrov

National Research University Higher School of Economics

Egor Yureskul

National Research University Higher School of Economics

Date Written: November 16, 2015

Abstract

This paper deals with a model of economic growth, which we expand to include endogenous policy switching based on retrospective voting. It is shown that under certain conditions the solution has a special form that we call a cyclically balanced growth path. This type of solution is an analogue to balanced growth paths, which often occur in growth models with constant policies. Cyclically balanced growth paths are investigated analytically, and the growth rate over the cycle has been found. Results of numerical experiments are also provided and possible empirical applications of the model are outlined.

Keywords: differential equations; dynamical model; policy space; democracy; autocracy; economic growth; efficiency; public capital; growth path; retrospective voting

JEL Classification: C61, H54, O41

Suggested Citation

Akhremenko, Andrei and Petrov, Alexander and Yureskul, Egor, Cyclically Balanced Growth Paths in a Model of Economic Growth with Endogenous Policy Switching (November 16, 2015). Higher School of Economics Research Paper No. WP BRP 109/EC/2015, Available at SSRN: https://ssrn.com/abstract=2691411 or http://dx.doi.org/10.2139/ssrn.2691411

Andrei Akhremenko (Contact Author)

National Research University Higher School of Economics ( email )

Myasnitskaya street, 20
Moscow, Moscow 119017
Russia

Alexander Petrov

National Research University Higher School of Economics ( email )

Myasnitskaya street, 20
Moscow, Moscow 119017
Russia

Egor Yureskul

National Research University Higher School of Economics ( email )

Myasnitskaya street, 20
Moscow, Moscow 119017
Russia

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