EINE VERALLGEMEINERUNG DES WACHSTUMSMODELLS VON SOLOW UND IHRE ANWENDUNG AUF DAS NEOKLASSISCHE THEOREM

Wolfgang J. MÜckl

Kyklos, 1972, vol. 25, issue 4, 771-790

Abstract: Solow's famous contribution to the theory of economic growth is based on the assumption that the savings proportions are the same for all income earners. In this study this restrictive premise is replaced by the assumption that the savings proportions vary according to the different groups of income earners. This paper sets out to analyse the resultant consequences for the long‐run equilibrium growth. One essential result is that both the overall savings proportion and the capital‐output‐ratio are flexible. Their steady‐state solutions are, in contrast to the respective solutions in Solow’s original paper, dependent on the form of the production function. Moreover, there can be derived certain conditions for the special long‐run equilibrium of the Neo‐Classical Theorem, which are implying no specific restrictions on the savings proportions of the various groups. Besides, there is shown that on these conditions not only a maximum of total consumption per man is achieved but also an equal distribution of consumption among all groups.

Date: 1972
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