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The Solow model in discrete time and decreasing population growth rate

Author

Listed:
  • Juan Sebastián Pereyra

    () (Universidad de la República)

  • Juan Gabriel Brida

    () (Free University of Bolzano)

Abstract

This paper reformulates the neoclassical Solow-Swan model of economic growth in discrete time by introducing a generic population growth law that verifies the following properties: 1) population is strictly increasing and bounded 2) the rate of growth of population is decreasing to zero as time tends to infinity. We show that in the long run the capital per worker of the model converges to the non-trivial steady state of the Solow Swan model with zero labor growth rate. In addition we prove that the solutions of the model are asymptotically stable.

Suggested Citation

  • Juan Sebastián Pereyra & Juan Gabriel Brida, 2008. "The Solow model in discrete time and decreasing population growth rate," Economics Bulletin, AccessEcon, vol. 3(41), pages 1-14.
  • Handle: RePEc:ebl:ecbull:eb-08c60002
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    References listed on IDEAS

    as
    1. Pasquale Commendatore, 2004. "Complex dynamics in a Pasinetti-Solow model of Growth and distribution," Computing in Economics and Finance 2004 279, Society for Computational Economics.
    2. Guerrini, Luca, 2006. "The Solow-Swan model with a bounded population growth rate," Journal of Mathematical Economics, Elsevier, vol. 42(1), pages 14-21, February.
    3. T. W. Swan, 1956. "ECONOMIC GROWTH and CAPITAL ACCUMULATION," The Economic Record, The Economic Society of Australia, vol. 32(2), pages 334-361, November.
    4. Luis A. Puch & Omar Licandro, 2006. "Is Discrete Time a Good Representation of Continuous Time?," Working Papers 2006-20, FEDEA.
    5. Erick José Limas Maldonado & Juan Gabriel Brida, 2005. "Closed form solutions to a generalization of the Solow growth model," GE, Growth, Math methods 0510003, University Library of Munich, Germany.
    6. Day, Richard H, 1982. "Irregular Growth Cycles," American Economic Review, American Economic Association, vol. 72(3), pages 406-414, June.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Solow model;

    JEL classification:

    • C6 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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