A Simple Stylized Long-Run Growth Model for Haiti
- The Haitian economy converges to its steady-state in about 90 periods under base assumptions.
- Starting capital-to-output ratio of 2.5 is well below its steady-state value of 3.8.
- Increase in TFP growth implies an increasing divergence between the base and non-base levels of output and consumption.
- Tightening the constraint on the debt stock-to-output ratio increases the effort required in terms of domestic savings and investment.
- Improvement in the absorptive capacity of capital leads to a higher growth rate and faster capital accumulation.
The study develops a stylized dynamic growth model for Haiti to analyze long-run growth prospects. The model incorporates factors such as population growth, total factor productivity (TFP), capital accumulation, and foreign debt. It aims to provide a basic framework for counterfactual exercises to estimate the dynamic growth potential of Haiti's main macroeconomic aggregates, considering the impact of changes in financing conditions or international aid. The model is designed to complement existing models and address questions related to long-run growth rates, capital accumulation requirements, and the transitional dynamics of macroeconomic stocks and flows.
How to cite
Inter-American Development Bank (IDB), 2018, A Simple Stylized Long-Run Growth Model for Haiti, https://publications.iadb.org/en/simple-stylized-long-run-growth-model-haiti