Neoclassical Growth Theory

Sibabrata Das (), Alex Mourmouras () and Peter C. Rangazas ()
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Sibabrata Das: International Monetary Fund
Alex Mourmouras: International Monetary Fund
Peter C. Rangazas: Indiana University-Purdue University Indianapolis (IUPUI)

Chapter Chapter 2 in Economic Growth and Development, 2015, pp 11-50 from Springer

Abstract: Abstract This chapter discusses the one-sector neoclassical growth model—the foundation for all the growth theory in the book. The primary focus of the chapter is growth via capital accumulation. We think of capital as man-made durable inputs to the production process. The first type of capital we include is physical capital. For our purposes, physical capital can be primarily thought of as plant and equipment that is produced in one period and then used in production in the following period. (Definitions of physical capital will vary depending on the purpose at hand. In some cases, physical capital is defined to include inventories, software, land, and other inputs that extend beyond plant and equipment.) To model production, we introduce firms, economic institutionsInstitutions that combine physical capital and labor to produce goods and services.

Keywords: Interest Rate; Human Capital; Physical Capital; Human Capital Investment; Financial Transfer (search for similar items in EconPapers)
Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sptchp:978-3-319-14265-4_2

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DOI: 10.1007/978-3-319-14265-4_2

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