The Basic Model for the Integration

Wei-Bin Zhang

Chapter Chapter 2 in The General Economic Theory, 2020, pp 19-39 from Springer

Abstract: Abstract This chapter starts the process of constructing the theory by building a model, called the basic model in this book, similar to the Solow–Swan model with an alternative concept of disposable income and utility function. It defines the basic model and its relations with some core growth models in macroeconomics. The first two sections develop the basic model and examine its behavior. Section 2.3 provides a theoretical foundation for the utility function proposed by the author. Section 2.4 shows that the rational behavior of household in the basic model yields the same economic mechanism as in the Keynesian consumption function. Section 2.5 shows that the basic model generates the same economic phenomena as the Solow growth model if I specify some preference change. Section 2.6 shows that the basic model generates the same economic phenomena as the Ramsey–Cass–Koopmans model with some endogenous preference change.

Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-030-56204-5_2

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DOI: 10.1007/978-3-030-56204-5_2

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