Article (Scientific journals)
Neoclassical growth and the "trivial" steady state
Hakenes, Hendrik; IRMEN, Andreas
2008In Journal of Macroeconomics, 30 (3), p. 1097-1103
Peer reviewed
 

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Abstract :
[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.
Disciplines :
Macroeconomics & monetary economics
Author, co-author :
Hakenes, Hendrik
IRMEN, Andreas  ;  University of Luxembourg > Faculty of Law, Economics and Finance (FDEF) > Center for Research in Economic Analysis (CREA)
Language :
English
Title :
Neoclassical growth and the "trivial" steady state
Publication date :
2008
Journal title :
Journal of Macroeconomics
Volume :
30
Issue :
3
Pages :
1097-1103
Peer reviewed :
Peer reviewed
Available on ORBilu :
since 28 November 2013

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