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Economic Growth, the Mathematical Pendulum, and a Golden Rule of Thumb

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  • Thomas Christiaans

Abstract

It is argued that due to their general instability dynamic optimization models cannot be used as positive theories of economic growth. The argument is substantiated by (numerical) examples. A simple rule of thumb is provided as an alternative to the RKC model. This rule is shown to perform well from a normativeand to be reasonable from a positive point of view. The model is consistent with empirically estimated rates of convergence if a broad concept of capital is used.

Suggested Citation

  • Thomas Christiaans, 2001. "Economic Growth, the Mathematical Pendulum, and a Golden Rule of Thumb," Volkswirtschaftliche Diskussionsbeiträge 94-01, Universität Siegen, Fakultät Wirtschaftswissenschaften, Wirtschaftsinformatik und Wirtschaftsrecht.
    • Handle: RePEc:sie:siegen:94-01
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    File URL: http://www.wiwi.uni-siegen.de/vwl/repec/sie/papers/94-01.pdf
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    References listed on IDEAS

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    1. P.M. Hartley & L.C.G. Rogers, 2005. "Two‐Sector Stochastic Growth Models," Australian Economic Papers, Wiley Blackwell, vol. 44(4), pages 322-351, December.

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    More about this item

    JEL classification:

    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • D90 - Microeconomics - - Micro-Based Behavioral Economics - - - General

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