A model of creative destruction with undiversifiable risk and optimising households

Article Abstract:

Undiversifiable risk and optimal household behavior is examined using a model of creative destruction. The model characterizes the saving technology by stochastic returns that follow a Poisson process. Results indicate that equilibrium conditions with optimizing households differ significantly from equilibrium conditions where investment R&D is determined by firms. Joint financing of R&D ventures by many households results in a strategic complementarity via the dependence of individual investment decisions on aggregate investment.

Research and Development in the Physical, Engineering, and Life Sciences, Commercial physical research, Research & Development-Industry, Models, Industrial research, Risk (Economics), Investments, Households, Equilibrium (Economics)

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The Asian miracle and modern growth theory

Article Abstract:

A major change in the economic structures of Asian countries allowed these countries to experience rapid economic growth between 1960 and 1996. These changes included shifts in the size of companies and the sectors of specialization. Accumulation of capital and its productive assimilation were critical factors that spurred the so-called Asian miracle. Estimates of the impact of total factor productivity to total growth that bypass these phenomena may result in inaccurate estimates.

Research, Economic aspects, Economic development, Asia, Capital formation

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