Munich Personal RePEc Archive

An Endogenously Derived AK-model of Economic Growth

Jensen, Christian (2013): An Endogenously Derived AK-model of Economic Growth.

This is the latest version of this item.

[img]
Preview
PDF
MPRA_paper_44487.pdf

Download (139kB) | Preview

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.

Available Versions of this Item

UB_LMU-Logo
MPRA is a RePEc service hosted by
the Munich University Library in Germany.