 Automation and Growth in the Solow Model: Threshold Dynamics, Transitions, and Long-Run OutcomesMPRA Paper from University Library of Munich, Germany Abstract: This paper introduces automation into an otherwise standard Solow growth model and shows that doing so can generate qualitatively different global dynamics. By modeling automation as a distinct form of capital and defining aggregate assets as the sum of physical and automation capital, the law of motion for aggregate assets per capita becomes piecewise defined, with a threshold separating a regime without automation from one in which physical and automation capital are jointly accumulated. Depending on the saving rate and structural parameters, the economy may converge to a Solow-type steady state without automation, a mixed-capital steady state with automation, or exhibit unbounded AK-type growth. We identify simple parameter restrictions that govern the feasibility of sustained growth and the long-run adoption of automation. Furthermore, we complement the qualitative analysis with closed-form solutions that provide a tractable and transparent characterization of the model’s full dynamic path. Keywords: Solow growth model; automation; saving rate; transitional dynamics; threshold dynamics; closed-form solutions (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:127795 Access Statistics for this paper More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC. |
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