INFS2001 - MAIN POINTS : Endogenous or new growth theory as...

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Unformatted text preview: MAIN POINTS : Endogenous or new growth theory as a reaction to the Solow-Swan growth model: saving and steady state growth; diminishing returns and steady state growth Endogenous growth, the optimising consumer and the simple linear production model Endogenous growth and labour as human capital Endogenous growth and R & D The significance of externalities for endogenous growth Some problems with new growth theory MARGINALIST GROWTH THEORY II - ENDOGENOUS GROWTH MODELS Solow-Swan explains steady state growth in terms of exogenous factors Suggests also that s does not influence steady state growth rate of output per head How to reconcile lack of influence of the saving propensity with orthodox belief that S drives I Some have argued that evidence does not support the lack of influence of s- viz., s appears to influence growth in output per head => development of endogenous growth model, where growth is not governed by an exogenous changes in technology An attempt to provide a theory where the source of growth is endogenous Consider the Solow-Swan per worker production function ( 29 k . A k f y = = Can obtain growth in steady state output per worker by exogenous growth in A => overcoming effects of diminshing returns where < 1 k ( 29 k f k* . n g k s ( 29 k f ( 29 * k f .. (7.1) Representative agent is assumed to maximise the following intertemporal utility function Endogenous growth theory...
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This note was uploaded on 04/20/2010 for the course INFS 2001 taught by Professor ? during the One '08 term at University of Sydney.

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INFS2001 - MAIN POINTS : Endogenous or new growth theory as...

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