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Time Series Tests of the AK Model of Endogenous Growth

In: Technology, Innovations and Growth

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  • Jati K. Sengupta

Abstract

In the AK model of growth, a country’s output per capita grows linearly with investment as a percentage of GDP. The model predicts that changes in policies that affect the investment rate should in turn affect growth rates, given a fixed capital-output ratio and depreciation, allowing an endogenous form of growth. The theory thus requires fundamental similarity in the dynamics of economic growth and investment rates for an economy.

Suggested Citation

  • Jati K. Sengupta, 2011. "Time Series Tests of the AK Model of Endogenous Growth," Palgrave Macmillan Books, in: Technology, Innovations and Growth, chapter 6, pages 144-173, Palgrave Macmillan.
    • Handle: RePEc:pal:palchp:978-0-230-29525-4_6
    DOI: 10.1057/9780230295254_6
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