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An Experimental AK Model of Growth

Author

Listed:
  • Ferruccio Ponzano
  • Roberto Ricciuti

Abstract

In this paper we test the AK model of growth with laboratory experiments. In each period, agents produce and trade output in a market, and allocate it to consumption and investment. The economy should experience a constant and positive rate of growth. We analyze two treatments differing from technology. We find evidence of positive and constant growth, and the treatment with a better technology exhibits higher growth. Remarkably, production, consumption and the capital stock grow at the same rate in the treatment with lower technology. We find that this growth process is fuelled by large inequalities between subjects.

Suggested Citation

  • Ferruccio Ponzano & Roberto Ricciuti, 2012. "An Experimental AK Model of Growth," CESifo Working Paper Series 3744, CESifo.
    • Handle: RePEc:ces:ceswps:_3744
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    File URL: https://www.cesifo.org/DocDL/cesifo1_wp3744.pdf
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    References listed on IDEAS

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    1. Feltovich, Nick & Ejebu, Ourega-Zoé, 2014. "Do positional goods inhibit saving? Evidence from a life-cycle experiment," Journal of Economic Behavior & Organization, Elsevier, vol. 107(PB), pages 440-454.

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    More about this item

    Keywords

    endogenous growth; capital accumulation; heterogeneity; experiments;
    All these keywords.

    JEL classification:

    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior

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