For over thirty years, the model of Lucas (1978) has been the platform of research on dynamic asset pricing and business cycles. This model restricts the intertemporal behavior of asset prices and ties those restrictions to cross-sectional behavior (the “equity premium”). The intertemporal restrictions reject the strictest interpretation of the Efficient Markets Hypothesis, namely, that prices ...

In this paper, we extend the growth model to include firm-specific technology capital and use it to assess the gains from opening to foreign direct investment. A firm’s technology capital is its unique know-how from investing in research and development, brands, and organization capital. Technology capital is distinguished from other forms of capital in that a firm can use it simultaneously in ...

Within an endogenous growth framework, we examine dynamic gains from trade for parametrically distinct countries. In the absence of international spillovers or factor mobility, previous endogenous growth models generally imply that trade in goods must amplify differences in (1) factor endowments, (2) rates of technical change and (3) economic growth. Even the dynamic HOS model suggests that tra...

Introduction 1.1 There has been a flowering of theoretical literature in “ new” or endogenous growth theory in the last decade, primarily motivated by the divergent growth experiences of different countries, which the neoclassical growth theory of the Solow (1956)-Swan (1956) genre is incapable of addressing. The path-breaking works of Romer (1986, 1990), Lucas (1988), Prescott and Boyd (1987),...

in this study, the impact of internal r&d; expenditure, technology imports and interaction effects between human capital and technology imports on value added of iranian large industries are investigated over the period of 1994-2008. for this purpose, an endogenous growth model is used in which production is a function of labor, capital stock, human capital, internal r&d; expenditure, technolog...

This paper simulates the impact of a permanent fertility shock on economic growth, using endogenous versus exogenous growth OLG models. An endogenous growth model, with education as the engine of growth, dampens the negative impact of a decline in fertility on growth when compared with an exogenous growth model. This result stems from the rise in education levels brought about by the expectatio...

This paper reports on experimental tests of the Lucas asset pricing model with heterogeneous agents and time-varying (individual) endowment streams. In order to emulate key features of the model (infinite horizon, stationarity, perishability of consumption), a novel experimental design was required. The experimental evidence provides broad support for the cross-sectional, inter-temporal pricing...