According to a common perception, the neoclassical economy void of capital cannot evolve to strictly positive levels of output, if capital is essential. We challenge this view and claim for a broad class of production functions, encompassing the neoclassical production function, that a take-off is possible even though the initial capital stock is zero and capital is essential. Since the marginal product of capital is initially infinite, the "trivial" steady state becomes so unstable that the solution to the equation of motion involves the possibility of a take-off. When it happens, the take-off has no cause.
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Volume (Year): 30 (2008) Issue (Month): 3 (September) Pages: 1097-1103 Download reference. The following formats are available: HTML
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Swan, Trevor W, 2002.
"Economic Growth,"
The Economic Record,
The Economic Society of Australia, vol. 78(243), pages 375-80, December.
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