Reference : Neoclassical growth and the "trivial" steady state
Scientific journals : Article
Business & economic sciences : Macroeconomics & monetary economics
http://hdl.handle.net/10993/12266
Neoclassical growth and the "trivial" steady state
English
Hakenes, Hendrik [> >]
Irmen, Andreas mailto [University of Luxembourg > Faculty of Law, Economics and Finance (FDEF) > Center for Research in Economic Analysis (CREA)]
2008
Journal of Macroeconomics
30
3
1097-1103
Yes
International
[en] According to a common perception, the neoclassical economy void of capital cannot evolve to strictly positive levels of output, if capital is essential. We challenge this view and claim for a broad class of production functions, encompassing the neoclassical production function, that a take-off is possible even though the initial capital stock is zero and capital is essential. Since the marginal product of capital is initially infinite, the \"trivial\" steady state becomes so unstable that the solution to the equation of motion involves the possibility of a take-off. When it happens, the take-off has no cause.
Researchers ; Professionals ; Students
http://hdl.handle.net/10993/12266
http://ideas.repec.org/a/eee/jmacro/v30y2008i3p1097-1103.html

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