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Zeitschrift für Nationalökonomie

, Volume 29, Issue 3–4, pp 305–312 | Cite as

On the road to the Golden Age

  • Bertil Näslund
Abhandlungen

Summary

To find a pattern leading to the Golden Age it is necessary to introduce a principle for the division of consumption between generations.

The Golden Rule result gives the fraction of G. N. P. that each generation saves on behalf of future generations but since this fraction is constant, previous generations have made an “identical” sacrifice on behalf of the present one.

In a similar fashion it is postulated here that every generation chooses the proportion of G. N. P. which it wishes to save while requiring previous generations to save in exactly the same way. This means that although very generations would like to increase its consumption, it does not wish earlier generations to do so since that would leave less total G. N. P. in the present.

The part of G. N. P. to be invested is assumed to be a certain, to be determined, function of time. The production function is taken to be Cobb-Douglas with constant returns to scale. The optimal growth path is determined under various assumptions about labour supply. It is shown that the Golden Age results are obtained as time approaches infinity.

Keywords

Economic Theory Production Function International Economic Labour Supply Future Generation 
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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References

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    S. Chakravarty: The Existence of an Optimum Savings Program, EconometricaXXX (1962), pp. 178–187.Google Scholar
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    M. Kurz: Optimal Paths of Capital Accumulation Under the Minimum Time Objective, Econometrica33 (1965), pp. 42–66.Google Scholar
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    I. Pearce: The End of the Golden Age in Solovia, The American Economic ReviewLII (1962), pp. 1088–97.Google Scholar
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    E. Phelps: The Golden Rate of Accumulation: A Fable for Growth Men, The American Economic ReviewLI (1961), pp. 638–43.Google Scholar
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    E. Phelps: A Comment, The American Economic ReviewLII (1962), pp. 1097–99.Google Scholar
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    E. Phelps: Golden Rules of Economic Growth, Amsterdam 1967.Google Scholar
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    J. Robinson: A Neo-Classical Theorem, The Review of Economic StudiesXXIV (1962), pp. 219–226.Google Scholar

Copyright information

© Springer-Verlag 1969

Authors and Affiliations

  • Bertil Näslund
    • 1
  1. 1.Företagsekonomiska institutionenStockholms UniversitetStockholm 23Sweden

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