Endogenous Growth Cycles

28 Pages Posted: 25 Aug 2005

See all articles by Klaus Wälde

Klaus Wälde

University of Mainz; CESifo (Center for Economic Studies and Ifo Institute); UCL at Louvain la Neuve


Current explanations for why a growing economy necessarily goes through periods of high and low growth predict countercyclical R&D investment. As this is very controversial from an empirical perspective, a stochastic Poisson model of endogenous growth cycles is presented where the determinants of the cyclical behavior of R&D investment are analytically studied. Providing an explicit expression for the expected length of a cycle shows that high-frequency fluctuations can indeed be understood by this approach. It is also shown how small technological improvements translate into large aggregate fluctuations.

Suggested Citation

Wälde, Klaus, Endogenous Growth Cycles. International Economic Review, Vol. 46, No. 3, pp. 867-894, August 2005, Available at SSRN: https://ssrn.com/abstract=758067

Klaus Wälde (Contact Author)

University of Mainz ( email )

Mainz School of Management and Economics
Mainz, 55128
+49 6131 3920143 (Phone)

HOME PAGE: http://www.waelde.com

CESifo (Center for Economic Studies and Ifo Institute)

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Munich, DE-81679

UCL at Louvain la Neuve

Place Montesquieu, 3
Louvain-la-Neuve, 1348

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