Endogenous Growth when Firms and Consumers Behave Rationally in a Neoclassical Framework
This paper presents a simple Neoclassical Growth Model in which technological change is endogenous and saving behaviour affects long-term equilibrium growth, despite its simple structure and reliance on all standard Neoclassical assumptions. The only relevant difference between this model and the standard models is that firms pursue an inter-temporal optimisation, which assures that their current decisions affect their future productivity. As a consequence, to invest in technology becomes a rational decision of firms. This simple improvement endows the Neoclassical Model to overcome two of its major shortcomings as pointed out in the literature.
|Date of creation:||2006|
|Date of revision:||2006|
|Contact details of provider:|| Postal: Rua Luis Guimaraes, no 207, Poco de Panela, Recife/PE|
Phone: +55 (081) 3267 1500
Fax: +55 (081) 3267 1512
Web page: http://184.108.40.206/
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:dtm:wpaper:59. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mirelle Queiroz)
If references are entirely missing, you can add them using this form.