Neoclassical Growth Theory

  • Sibabrata Das
  • Alex Mourmouras
  • Peter C. RangazasEmail author
Part of the Springer Texts in Business and Economics book series (STBE)


This chapter discusses the one-sector neoclassical growth model—the foundation for all the growth theory in the book. The primary focus of the chapter is growth via capital accumulation. We think of capital as man-made durable inputs to the production process. The first type of capital we include is physical capital. For our purposes, physical capital can be primarily thought of as plant and equipment that is produced in one period and then used in production in the following period. (Definitions of physical capital will vary depending on the purpose at hand. In some cases, physical capital is defined to include inventories, software, land, and other inputs that extend beyond plant and equipment.) To model production, we introduce firms, economic institutions that combine physical capital and labor to produce goods and services.


Interest Rate Human Capital Physical Capital Human Capital Investment Financial Transfer 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.


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Copyright information

© Springer International Publishing Switzerland 2015

Authors and Affiliations

  • Sibabrata Das
    • 1
  • Alex Mourmouras
    • 2
  • Peter C. Rangazas
    • 3
    Email author
  1. 1.International Monetary FundWashingtonUSA
  2. 2.Asia and Pacific DepartmentInternational Monetary FundWashingtonUSA
  3. 3.Indiana University-Purdue University Indianapolis (IUPUI)IndianapolisUSA

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