Re-formulation of the Solow economic growth model whit the Richards population growth law
In standard economic growth theory it is usually assumed that labor force follows exponential growth. That is not a realistic assumption. In this paper we introduce a generalized logistic equation (Richards law) that describes more accurately population growth. Then we analyze the neoclassical Solow model with growth of population following the Richards law, and compares it with the classical model with exponential growth. We show that with the Richards law, the intrinsic rate of population growth plays no role in determining long run equilibrium per worker level of capital. We also present the closed-form solution of the model when the production function is Cobb-Douglas and we analyze the stability of the model, contrasting its long run equilibrium with the steady state of the traditional model.
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- Andreas Irmen, 2004. "Malthus and Solow - a note on closed-form solutions," Economics Bulletin, AccessEcon, vol. 10(6), pages 1-6.
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"Economic growth, carrying capacity, and the environment,"
Elsevier, vol. 15(2), pages 91-95, November.
- Arrow, Kenneth & Bolin, Bert & Costanza, Robert & Dasgupta, Partha & Folke, Carl & Holling, C.S. & Jansson, Bengt-Owe & Levin, Simon & Mäler, Karl-Göran & Perrings, Charles & Pimentel, David, 1996. "Economic growth, carrying capacity, and the environment," Environment and Development Economics, Cambridge University Press, vol. 1(01), pages 104-110, February.
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