Reference : Neoclassical growth and the "trivial" steady state
Scientific journals : Article
Business & economic sciences : Macroeconomics & monetary economics
Neoclassical growth and the "trivial" steady state
Hakenes, Hendrik [> >]
Irmen, Andreas mailto [University of Luxembourg > Faculty of Law, Economics and Finance (FDEF) > Center for Research in Economic Analysis (CREA)]
Journal of Macroeconomics
[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

File(s) associated to this reference

Fulltext file(s):

Limited access
Trivial Final FinalJMacro.pdfAuthor preprint159.93 kBRequest a copy

Bookmark and Share SFX Query

All documents in ORBilu are protected by a user license.