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Existence and Stability of Steady State in an Augmented Solow Model with Multiple Capital Goods

Author

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  • Jian Li

    (School of Economics, Nanjing University, Nanjing 210093, China)

  • Yao Lu

    (School of Economics, Nanjing University, Nanjing 210093, China)

Abstract

This paper relaxes two assumptions on the traditional augmented Solow model: strict concavity of production functions and dual capital goods. It generalizes traditional conclusions of the Solow model by demonstrating that neoclassical properties of a production function are sufficient for the existence and global stability of the steady state in the augmented Solow model with multiple capital goods. Moreover, we prove necessity of essentiality of inputs for a neoclassical production function and generalize the golden rule of capital accumulation.

Suggested Citation

  • Jian Li & Yao Lu, 2018. "Existence and Stability of Steady State in an Augmented Solow Model with Multiple Capital Goods," Frontiers of Economics in China-Selected Publications from Chinese Universities, Higher Education Press, vol. 13(4), pages 685-702, December.
    • Handle: RePEc:fec:journl:v:13:y:2018:i:4:p:685-702
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    File URL: http://journal.hep.com.cn/fec/EN/10.3868/s060-007-018-0031-4
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    More about this item

    Keywords

    multiple capital goods; augmented Solow model; essentiality of inputs; steady state; strict concavity;
    All these keywords.

    JEL classification:

    • C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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