IDEAS home Printed from https://ideas.repec.org/a/eee/jmacro/v30y2008i3p1097-1103.html
   My bibliography  Save this article

Neoclassical growth and the "trivial" steady state

Author

Listed:
  • Hakenes, Hendrik
  • Irmen, Andreas

Abstract

According to a common perception, the neoclassical economy void of capital cannot evolve to strictly positive levels of output, if capital is essential. We challenge this view and claim for a broad class of production functions, encompassing the neoclassical production function, that a take-off is possible even though the initial capital stock is zero and capital is essential. Since the marginal product of capital is initially infinite, the "trivial" steady state becomes so unstable that the solution to the equation of motion involves the possibility of a take-off. When it happens, the take-off has no cause.

Suggested Citation

  • Hakenes, Hendrik & Irmen, Andreas, 2008. "Neoclassical growth and the "trivial" steady state," Journal of Macroeconomics, Elsevier, vol. 30(3), pages 1097-1103, September.
    • Handle: RePEc:eee:jmacro:v:30:y:2008:i:3:p:1097-1103
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0164-0704(07)00100-0
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Robert M. Solow, 1956. "A Contribution to the Theory of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 70(1), pages 65-94.
    2. T. W. Swan, 1956. "ECONOMIC GROWTH and CAPITAL ACCUMULATION," The Economic Record, The Economic Society of Australia, vol. 32(2), pages 334-361, November.
    3. Murphy, Kevin M & Shleifer, Andrei & Vishny, Robert W, 1989. "Industrialization and the Big Push," Journal of Political Economy, University of Chicago Press, vol. 97(5), pages 1003-1026, October.
    4. N. Gregory Mankiw & David Romer & David N. Weil, 1992. "A Contribution to the Empirics of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 107(2), pages 407-437.
    5. Harris, John R & Todaro, Michael P, 1970. "Migration, Unemployment & Development: A Two-Sector Analysis," American Economic Review, American Economic Association, vol. 60(1), pages 126-142, March.
    6. repec:bla:ecorec:v:78:y:2002:i:243:p:375-80 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Zhang, Jin Shui, 2011. "The analytical solution of balanced growth of non-linear dynamic multi-sector economic model," Economic Modelling, Elsevier, vol. 28(1), pages 410-421.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Xavier Sala-i-Martin, 1990. "Lecture Notes on Economic Growth(I): Introduction to the Literature and Neoclassical Models," NBER Working Papers 3563, National Bureau of Economic Research, Inc.
    2. Durlauf, Steven N. & Quah, Danny T., 1999. "The new empirics of economic growth," Handbook of Macroeconomics, in: J. B. Taylor & M. Woodford (ed.), Handbook of Macroeconomics, edition 1, volume 1, chapter 4, pages 235-308, Elsevier.
    3. Markus Eberhardt & Francis Teal, 2011. "Econometrics For Grumblers: A New Look At The Literature On Cross‐Country Growth Empirics," Journal of Economic Surveys, Wiley Blackwell, vol. 25(1), pages 109-155, February.
    4. Markus Eberhardt & Francis Teal, 2010. "Aggregation versus Heterogeneity in Cross-Country Growth Empirics," CSAE Working Paper Series 2010-32, Centre for the Study of African Economies, University of Oxford.
    5. Nowak-Lehmann D., Felicitas, 2000. "Was there endogenous growth in Chile (1960 - 1998)? A test of the AK-model," University of Göttingen Working Papers in Economics 7, University of Goettingen, Department of Economics.
    6. Pakrashi, Debayan & Frijters, Paul, 2017. "Takeoffs, Landing, and Economic Growth," ADBI Working Papers 641, Asian Development Bank Institute.
    7. Long, N.V. & Wong, K.Y., 1996. "Endogenous Growth and International Trade: A Survey," Working Papers 96-07, University of Washington, Department of Economics.
    8. Gordon Menzies, 2018. "A Synthesis of the Lewis Development Model and Neoclassical Trade Models," Working Paper Series 46, Economics Discipline Group, UTS Business School, University of Technology, Sydney.
    9. Minea, Alexandru, 2008. "The Role of Public Spending in the Growth Theory Evolution," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 5(2), pages 99-120, June.
    10. Magrini, Stefano, 2004. "Regional (di)convergence," Handbook of Regional and Urban Economics, in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 62, pages 2741-2796, Elsevier.
    11. Ruttan, Vernon W., 1998. "Growth Economics And Development Economics: What Should Development Economists Learn (If Anything) From The New Growth Theory?," Bulletins 12972, University of Minnesota, Economic Development Center.
    12. Chih Ming Tan, 2007. "Economic Growth Nonlinearities," Discussion Papers Series, Department of Economics, Tufts University 0701, Department of Economics, Tufts University.
    13. Markus Eberhardt & Francis Teal, 2011. "Econometrics For Grumblers: A New Look At The Literature On Cross‐Country Growth Empirics," Journal of Economic Surveys, Wiley Blackwell, vol. 25(1), pages 109-155, 02.

    More about this item

    JEL classification:

    • N60 - Economic History - - Manufacturing and Construction - - - General, International, or Comparative
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jmacro:v:30:y:2008:i:3:p:1097-1103. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/622617 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.