An Endogenously Derived AK-model of Economic Growth
AbstractAssuming a production process with returns to scale that vary with the intensity it is operated at, an AK-model of endogenous growth with constant returns to scale in production is shown to arise due to replication driven by profit-maximization. If replication occurs at the efficiency-maximizing scale, the result applies also when the number of production processes must be discrete, thus overcoming the so-called integer problem. When competition is imperfect, there is only convergence toward the AK-model for large enough input use, so an economy is more prone to stalling in a steady-state without growth, the smaller and less competitive it is. Inefficient scaling also raises the risk of stalling.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 44487.
Date of creation: Feb 2013
Date of revision:
Economic growth; AK-model; Replication; Returns to scale in production; Integer problem;
Find related papers by JEL classification:
- O11 - Economic Development, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
- O40 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
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- NEP-ALL-2013-03-16 (All new papers)
- NEP-DGE-2013-03-16 (Dynamic General Equilibrium)
- NEP-FDG-2013-03-16 (Financial Development & Growth)
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