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Growth and Inequality in an Experimental AK Model

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  • Ferruccio Ponzano

    (University of Eastern Piedmont)

  • Roberto Ricciuti

    (University of Verona and CESifo)

Abstract

In this paper we test the AK model of growth with laboratory experiments. In each period, agents produce and trade output in a market, and allocate it to consumption and investment. The economy should experience a constant and positive rate of growth. We analyze two treatments differing from technology. We find evidence of positive and constant growth, and the treatment with a better technology exhibits higher growth. Although subjects start the experiments with the same endowments, we find that this growth process is fueled by large inequalities.

Suggested Citation

  • Ferruccio Ponzano & Roberto Ricciuti, 2018. "Growth and Inequality in an Experimental AK Model," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 4(2), pages 313-330, July.
    • Handle: RePEc:spr:italej:v:4:y:2018:i:2:d:10.1007_s40797-017-0066-y
    DOI: 10.1007/s40797-017-0066-y
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    More about this item

    Keywords

    Endogenous growth; Capital accumulation; Inequality; Heterogeneity; Experiments;
    All these keywords.

    JEL classification:

    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior

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