On the Multi‐Country Version of the Solow–Swan Model

Gerhard Sorger

The Japanese Economic Review, 2003, vol. 54, issue 2, 146-164

Abstract: I study a multi‐country version of the Solow–Swan model of capital accumulation. Capital is perfectly mobile and flows instantaneously to countries providing the highest return. I show that, in general, the model possesses infinitely many stationary equilibria that differ from each other in terms of the world interest rate and world output. Analysing the dynamics of the model, I find that multiple equilibria exist for any given initial allocation of capital. Finally, I discuss a generalization of the golden rule to the multi‐country version of the Solow–Swan model and show that it satisfies a Nash equilibrium property. JEL Classification Numbers: F20, O41

Date: 2003
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