Advertisement

Neoclassical Growth Theory

  • Sibabrata Das
  • Alex Mourmouras
  • Peter C. RangazasEmail author
Chapter
  • 1.7k Downloads
Part of the Springer Texts in Business and Economics book series (STBE)

Abstract

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.

Keywords

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.

References

  1. Abel A (1985) Precautionary saving and accidental bequests. Am Econ Rev 75(4):777–791Google Scholar
  2. Acemoglu D (2009) Introduction to modern economic growth. Princeton University Press, PrincetonGoogle Scholar
  3. Altonji J, Hayshi F, Kotlikoff L (1997) Parental altruism and inter vivos transfers: theory and evidence. J Polit Econ 105(6):1121–1166CrossRefGoogle Scholar
  4. Auerbach A, Kotlikoff L (1998) Macroeconomics: an integrated approach. MIT Press, CambridgeGoogle Scholar
  5. Auerbach A, Kotlikoff L, Skinner J (1983) The efficiency gains from dynamic tax reform. International economic review 24(1):81–100CrossRefGoogle Scholar
  6. Azariadis C (1993) Intertemporal macroeconomics. Blackwell, OxfordGoogle Scholar
  7. Barro R (1974) Are government bonds net wealth? J Polit Econ 82(6):1095–1118CrossRefGoogle Scholar
  8. Barro R (1997) Macroeconomics. MIT Press, CambridgeGoogle Scholar
  9. Becker G (1974) A theory of social interactions. J Polit Econ 82(6):1063–1094CrossRefGoogle Scholar
  10. Becker G (1981) A treatise on the family. Harvard University Press, CambridgeGoogle Scholar
  11. Becker G (1988) Family economics and macro behavior. Am Econ Rev 78(1):1–13Google Scholar
  12. Bernheim D, Shleifer A, Summers L (1985) The strategic bequest motive. J Polit Econ 93(6):1045–1076CrossRefGoogle Scholar
  13. Córdoba J, Ripoll M (2013) What explains schooling differences across countries? J Monetary Econ 60(2):184–202CrossRefGoogle Scholar
  14. Cox D (1987) Motives for private income transfers. J Polit Econ 95(3):508–546CrossRefGoogle Scholar
  15. Davies J (1981) Uncertain lifetime, consumption and dissaving in retirement. J Polit Econ 89(3):561–577CrossRefGoogle Scholar
  16. de la Croix D, Michel P (2002) A theory of economic growth: dynamics and policy in overlapping generations. Cambridge University Press, CambridgeGoogle Scholar
  17. Diamond P (1965) National debt in a neoclassical growth model. Am Econ Rev 55(5):1126–1150Google Scholar
  18. Drazen A (1978) Government debt, human capital, and bequests in a life-cycle model. J Polit Econ 86(3):505–516CrossRefGoogle Scholar
  19. Farmer K, Schelnast M (2013) Growth and international trade: an introduction to the overlapping generations approach. Springer, BerlinCrossRefGoogle Scholar
  20. Gollin D (2002) Getting income shares right. J Polit Econ 110(2):458–474Google Scholar
  21. Hansen L, Heckman J (1996) The empirical foundations of calibration. J Econ Perspect 10(1):87–104CrossRefGoogle Scholar
  22. Heckman J, Cunha F (2007) The technology of skill formation. Am Econ Rev 97(2):31–47CrossRefGoogle Scholar
  23. Hurd M (1989) Mortality risk and bequests. Econometrica 57(4):779–813CrossRefGoogle Scholar
  24. King R, Rebelo S (1993) Transitional dynamics and economic growth in the neoclassical growth model. Am Econ Rev 83:908–931Google Scholar
  25. Kocherlakota N (1996) The equity premium: it’s still a puzzle. J Econ Lit 34(1):42–71Google Scholar
  26. Kydland F, Prescott E (1982) Time to build and aggregate fluctuations. Econometrica 50(6):1345–1370CrossRefGoogle Scholar
  27. Kydland F, Prescott E (1996) The computational experiment: an econometric tool. J Econ Perspect 10(1):69–86CrossRefGoogle Scholar
  28. Lord W (2001) Household dynamics, policies, and economic growth. Oxford University Press, New YorkGoogle Scholar
  29. Lord W, Rangazas P (2006) Fertility and development: the roles of schooling and family production. J Econ Growth 11(3):229–261CrossRefGoogle Scholar
  30. Manuelli R, Seshadri A (2014) Human capital and the wealth of nations. Am Econ Rev 104 (9):2736–2762Google Scholar
  31. Mourmouras A, Rangazas P (2009) Reconciling Kuznets and Habbakuk in a unified growth model. J Econ Growth 14(2):149–181CrossRefGoogle Scholar
  32. Parente S, Prescott E (2000) Barriers to riches. MIT Press, CambridgeGoogle Scholar
  33. Rangazas P (2000) Schooling and economic growth: a King-Rebelo experiment with human capital. J Monetary Econ 46(2):397–416CrossRefGoogle Scholar
  34. Rangazas P (2002) The quantity and quality of schooling and U.S. labor productivity growth (1870–2000). Rev Econ Dyn 5(4):932–964CrossRefGoogle Scholar
  35. Romer D (2001) Advanced macroeconomics. McGraw-Hill, New YorkGoogle Scholar
  36. Stokey N, Lucas R (1989) Recursive methods in economic dynamics. Harvard University Press, Cambridge MassGoogle Scholar
  37. Stokey N, Rebelo S (1995) Growth effects of flat-rate taxes. J Polit Econ 103(3):519–550CrossRefGoogle Scholar
  38. Summers L (1981) Capital taxation and capital accumulation in a life-cycle growth model. Am Econ Rev 71(4):533–544Google Scholar
  39. Wallis J (2000) American government finance in the long-run: 1790–1990. J Econ Perspect 14(1):61–82CrossRefGoogle Scholar
  40. Wilhelm M (1996) Bequest behavior and the effect of heirs’ earnings: testing the altruistic model of bequests. Am Econ Rev 86(4):874–892Google Scholar

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

Personalised recommendations