Coast to Coast: How MIT's students linked the Solow model and optimal growth theory

Matheus Assaf ()

No 2017_20, Working Papers, Department of Economics from University of São Paulo (FEA-USP)

Abstract: Textbook narratives usually describe the Ramsey-Cass-Koopmans model of optimal growth as an important development over Solow’s model. The constant saving rate rule of the latter is replaced by an endogenous determination of savings rates based on utility maximization behaviour of the former. However, neither Tjalling Koopmans nor David Cass were trying to upgrade Robert Solow’s modelling of savings with their contributions. Koopmans was pushing for utilitarian analysis to study economic growth within the activity analysis community, with the help of Edmond Malinvaud. Cass and his colleagues at Stanford’s graduate program were exploring the multiple applications of the maximum principle on economic growth models, influenced mostly by Hirofumi Uzawa. When the group of Stanford students graduated and moved to different departments, Karl Shell brought his interest on optimal growth and technical progress to the MIT. There, he organized a conference in 1965-66 that united his Stanford colleagues and MIT young scholars to discuss optimal growth theory. The conference represented the formation of a scientific community that consolidated optimal growth theory in the second half of the 1960 decade. The link between optimal growth theory and Solow’s model was consolidated by this community of young students. Most of them were advised by Solow. This paper plans to shed some light on the importance of the MIT in the history of optimal growth theory and to show how the standard textbook narrative is a MIT-only story.

Keywords: Optimal growth; History of Economic Thought; David Cass; Robert Solow. (search for similar items in EconPapers)
JEL-codes: B22 B23 B29 (search for similar items in EconPapers)
Date: 2017-10-27
New Economics Papers: this item is included in nep-gro, nep-his and nep-upt
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.repec.eae.fea.usp.br/documentos/MatheusAssaf_20WP.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spa:wpaper:2017wpecon20

Ordering information: This working paper can be ordered from

Access Statistics for this paper

More papers in Working Papers, Department of Economics from University of São Paulo (FEA-USP) Contact information at EDIRC.
Bibliographic data for series maintained by Pedro Garcia Duarte ( this e-mail address is bad, please contact ).