Endogenous Growth Models

Alfonso Novales, Esther Fernández and Jesus Ruiz

Chapter Chapter 6 in Economic Growth, 2014, pp 267-317 from Springer

Abstract: Abstract The AK model, introduced by Rebelo [6], is characterized by a constant returns to scale technology, linear in physical capital $$\displaystyle{ Y _{t} = AK_{t}, }$$ with A representing the constant average and marginal productivity of capital, and K t the aggregate stock of capital. As we saw in Chap. 2, aggregate constant returns to scale in the cumulative inputs is a necessary condition for endogenous growth. This assumption is a violation of the Inada condition $$\lim _{K_{t}\rightarrow \infty }F^{{\prime}}\left (K_{t}\right ) = 0,$$ which is assumed to hold in neoclassical growth models under decreasing returns to scale.

Keywords: Physical Capital; Endogenous Growth; Transversality Condition; Global Constraint; Endogenous Growth Model (search for similar items in EconPapers)
Date: 2014
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DOI: 10.1007/978-3-642-54950-2_6

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