An Endogenously Derived AK-model of Economic Growth

Christian Jensen ()

MPRA Paper from University Library of Munich, Germany

Abstract: Assuming a production process with returns to scale that vary with the intensity it is operated at, an AK-model of endogenous growth with constant returns to scale in production is shown to arise due to replication driven by profit-maximization. If replication occurs at the efficiency-maximizing scale, the result applies also when the number of production processes must be discrete, thus overcoming the so-called integer problem. When competition is imperfect, there is only convergence toward the AK-model for large enough input use, so an economy is more prone to stalling in a steady-state without growth, the smaller and less competitive it is. Inefficient scaling also raises the risk of stalling.

Keywords: Economic growth; AK-model; Replication; Returns to scale in production; Integer problem (search for similar items in EconPapers)
JEL-codes: O11 O40 (search for similar items in EconPapers)
Date: 2013-02
New Economics Papers: this item is included in nep-dge and nep-fdg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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https://mpra.ub.uni-muenchen.de/45639/1/MPRA_paper_44487.pdf revised version (application/pdf)

Related works:
Journal Article: AN ENDOGENOUSLY DERIVED AK MODEL OF ECONOMIC GROWTH (2018)
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