Growth, Cycles and Welfare: A Schumpeterian Perspective

Arbeitspapier

We use a Schumpeterian model in which both the economy's growth rate and its volatility are endogenously determined to assess some welfare and policy implications associated with business cycle fluctuations. Because it features a higher average growth rate than its acyclical counterpart, steady-state welfare is higher along the cyclical equilibrium growth path of the model. We assess the impact of alternative stabilization policies designed to smooth cyclical fluctuations. Although, it is possible to significantly reduce the variance of output growth via simple policy measures, the welfare benefits are at best negligible and at worst completely offset by the resulting reduction long-term productivity growth.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Queen's Economics Department Working Paper ; No. 1090

Classification and Topics

• Classification: Wirtschaft
• Subject: Endogenous cycles ; Endogenous growth ; Welfare ; Stabilization policy

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Francois, Patrick ; Lloyd-Ellis, Huw
• Event: Veröffentlichung
• (who): Queen's University, Department of Economics
• (where): Kingston (Ontario)
• (when): 2006

Further information

• Handle: http://hdl.handle.net/10419/189366
• Last update: 10.03.2025, 11:44 AM CET