Template-Type: ReDIF-Paper 1.0
Author-Name: Simon Gilchrist
Author-X-Name-First: Simon
Author-X-Name-Last: Gilchrist
Author-Email: sgilchri@bu.edu
Author-Workplace-Name: Institute for Economic Development, Boston University
Author-Name: John C. Williams
Author-X-Name-First:John C. 
Author-X-Name-Last: Williams
Author-Email: jwilliams@frb.gov
Author-Workplace-Name: Board of Governors, Federal Reserve System
Title:  Transition Dynamics in Vintage Capital Models: Explaining the Postwar Catch-up of 
Germany and Japan
Abstract:We consider a neoclassical interpretation of Germany and Japan’s rapid
postwar growth that relies on a catch-up mechanism through capital accumulation
where technology is embodied in new capital goods. Using a putty-clay
model of production and investment, we are able to capture many of the key
empirical properties of Germany and Japan’s postwar transitions, including persistently
high but declining rates of labor and total-factor productivity growth,
a U-shaped response of the capital-output ratio, rising rates of investment and
employment, and moderate rates of return to capital.

Length: 29 pages
Creation-Date: 2001-01
Revision-Date: 
Publication-Status: 
File-URL:http://people.bu.edu/sgilchri/research/transition_51.pdf
File-Format: Application/pdf
File-Function: 
Number: dp-113
Classification-JEL: D24; E22; N10; O41
Keywords: putty-clay, embodied technology, productivity growth, convergence
Handle: RePEc:bos:iedwpr:dp-113