The Dynamics of the Jones R&D Growth Model

The dynamics of most prominent endogenous growth models are well understood. One notable exception is the Jones (1995) R&D growth model. This paper provides an analytical treatment of this model's transitional dynamics. It is shown that, given constant returns to labor in R&D (as conventionally assumed in R&D growth models), a unique trajectory converging to the balanced growth path exists. The equilibrium growth path can be monotonic or oscillatory. Moreover, applying a theorem from Arnold (2005), this result can be used to characterize the dynamic behavior of the multi-country open-economy version of the model. (Copyright: Elsevier)