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A Fully Neoclassical Model with Endogenous Growth


  • Alexandre Rands

    () (Datamétrica Consultoria, Pesquisa e Telemarketing)


This paper presents a simple Neoclassical Growth Model in which technological change is endogenous, despite its simple structure and reliance on all standard Neoclassical assumptions. The only relevant difference between this model and the most popular original models is that firms pursue an inter-temporal optimization, which assures that their current decisions affect their future productivity. As a consequence, to invest in technology becomes a rational decision of firms. Therefore, this model stresses another intuitively important source of technical progress and endogenous growth, inter-temporal links among decisions by firms in their struggle to become relatively more efficient.

Suggested Citation

  • Alexandre Rands, 2001. "A Fully Neoclassical Model with Endogenous Growth," Working Papers 30, Datamétrica Consultoria Econômica, revised 2001.
  • Handle: RePEc:dtm:wpaper:30

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    File Function: Revised version, 2001.
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    More about this item


    Endogenous growth; Neoclassical growth; endogenous technological change.;

    JEL classification:

    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models


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