Endogenous Growth: Estimating the Romer Model for the Us and Germany

18 Pages Posted: 25 May 2004

See all articles by Gang Gong

Gang Gong

Tsinghua University - School of Economics & Management; University of Bielefeld

Alfred Greiner

Bielefeld University - Department of Business Administration and Economics

Willi Semmler

The New School - Department of Economics; Universitaet Bielefeld; IIASA

Abstract

By contrasting endogenous growth models with facts, one is frequently confronted with the prediction that levels of economic variables, such as R&D expenditures, imply lasting effects on the growth rate of an economy. As stylized facts show, the research intensity in most advanced countries has dramatically increased, mostly more than the GDP. Yet, the growth rates have roughly remained constant or even declined. In this paper, we modify the Romer endogenous growth model and test our variant of the model using time series data. We estimate the market version both for the US and Germany for the time period January 1962 to April 1996. Our results demonstrate that the model is compatible with the time series for aggregate data in those countries. All parameters fall into a reasonable range.

Suggested Citation

Gong, Gang and Greiner, Alfred and Semmler, Willi, Endogenous Growth: Estimating the Romer Model for the Us and Germany. Oxford Bulletin of Economics and Statistics, Vol. 66, No. 2, pp. 147-164, May 2004. Available at SSRN: https://ssrn.com/abstract=526854

Gang Gong (Contact Author)

Tsinghua University - School of Economics & Management ( email )

Beijing, 100084
China

University of Bielefeld

Universitätsstraße 25
Bielefeld, NRW
Germany

Alfred Greiner

Bielefeld University - Department of Business Administration and Economics ( email )

P.O. Box 100131
Bielefeld, 33501
Germany
+49 521 106 4859 (Phone)
+49 521 106 67120 (Fax)

HOME PAGE: http://phoenix.wiwi.uni-bielefeld.de/lehrbereiche/vwl/wipol

Willi Semmler

The New School - Department of Economics ( email )

65 Fifth Avenue
New York, NY 10003
United States

HOME PAGE: http://www.newschool.edu/nssr/faculty/?id=4e54-6b79-4e41-3d3d

Universitaet Bielefeld ( email )

Universitätsstraße 25
Bielefeld, NRW
Germany

IIASA ( email )

Schlossplatz 1
Laxenburg/Austria, A-2361
Austria

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