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Imbalance Effects in the Lucas Model: an Analytical Exploration

  • Raouf Boucekkine and Ramon Ruiz Tamarit
Published/Copyright: December 13, 2004
Contributions in Macroeconomics
From the journal Contributions in Macroeconomics Volume 4 Issue 1

Abstract

In this note, we extend Xie (JET, 1994) to solve analytically the Lucas model with a weak externality in a specific parametric case. In particular, we characterize the shape of imbalance effects in this model. Our results are mostly consistent with the findings of the related computational literature. Among other analytical findings, we prove that, while U-shaped imbalance effects are not apparent in the Lucas model for the growth rate of output per capita, the level of such a variable may exhibit this shape.

Keywords: Imbalance effects; Lucas model; Externality; Analytical solution
Published Online: 2004-12-13

©2011 Walter de Gruyter GmbH & Co. KG, Berlin/Boston

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  23. Do Minimum Wages Raise the NAIRU?
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  25. Creative Destruction and Policy in a Model of Endogenous Growth
  26. Intergenerational Habits, Fiscal Policy, and Welfare
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  28. Socio-Cultural Variables and Economic Success: Evidence from Italian Provinces 1951-1991
  29. Monetary Policy and the Information Content of the Yield Spread
  30. The Dynamics of Fertility and Growth: Baby Boom, Bust and Bounce-Back
  31. Imbalance Effects in the Lucas Model: an Analytical Exploration
  32. Assessing Aggregate Tests of Efficiency for Dynamic Economies
  33. The Output Gap, Expected Future Inflation and Inflation Dynamics: Another Look
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https://doi.org/10.2202/1534-5998.1232
Keywords for this article
Imbalance effects; Lucas model; Externality; Analytical solution

Articles in the same Issue

  1. Advances Article
  2. Price Stability and Monetary Policy Effectiveness when Nominal Interest Rates are Bounded at Zero
  3. Contributions Article
  4. Aggregate Price Changes and Dispersion: A Comparison of the Equity and Goods and Services Markets
  5. Dissemination of Technology in Market and Planned Economies
  6. Interest-Rate Smoothing: Monetary Policy Inertia or Unobserved Variables?
  7. Is the U.S. Aggregate Production Function Cobb-Douglas? New Estimates of the Elasticity of Substitution
  8. What Does It Take to Explain Procyclical Productivity?
  9. Endogenous Distribution, Politics, and the Growth-Equity Tradeoff
  10. Explaining Speculative Expansions
  11. Tariffs, Entry Regulation and Markups: Country Size Matters
  12. Schumpeterian Growth, North-South Trade and Wage Rigidity
  13. Do Federal Reserve Policy Surprises Reveal Superior Information about the Economy?
  14. Bailouts and Bank Runs in a Model of Crony Capitalism
  15. Multiple Equilibria in Heterogeneous Expectations Models
  16. Topics Article
  17. Empirical Perspectives on Long-Term External Debt
  18. Output Gap Uncertainty and Monetary Policy During the 1970s
  19. The UK Household Sector Demand for Risky Money
  20. The Relationship between Stock Prices, House Prices and Consumption in OECD Countries
  21. Labor Market Performance and Flexibility: Which Comes First?
  22. A Simple Locally Interactive Model of Ergodic and Nonergodic Growth
  23. Do Minimum Wages Raise the NAIRU?
  24. Strictly Endogenous Growth with Non-renewable Resources Implies an Unbounded Growth Rate
  25. Creative Destruction and Policy in a Model of Endogenous Growth
  26. Intergenerational Habits, Fiscal Policy, and Welfare
  27. Output Composition of the Monetary Policy Transmission Mechanism in Japan
  28. Socio-Cultural Variables and Economic Success: Evidence from Italian Provinces 1951-1991
  29. Monetary Policy and the Information Content of the Yield Spread
  30. The Dynamics of Fertility and Growth: Baby Boom, Bust and Bounce-Back
  31. Imbalance Effects in the Lucas Model: an Analytical Exploration
  32. Assessing Aggregate Tests of Efficiency for Dynamic Economies
  33. The Output Gap, Expected Future Inflation and Inflation Dynamics: Another Look
  34. Unions and Workforce Adjustment Costs
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