Abstract
This paper argues that growth theory needs a more general notion of “regularity” than that of exponential growth. We suggest that paths along which the rate of decline of the growth rate is proportional to the growth rate itself deserve attention. This opens up for considering a richer set of parameter combinations than in standard growth models. Moreover, it avoids the usual oversimplistic dichotomy of either exponential growth or stagnation. Allowing zero population growth in three different growth models (the Jones R&D-based model, a learning-by-doing model, and an embodied technical change model) serves as illustration that a continuum of “regular” growth processes fill the whole range between exponential growth and complete stagnation.
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For helpful comments and suggestions we would like to thank three anonymous referees, Carl-Johan Dalgaard, Hannes Egli, Jakub Growiec, Chad Jones, Sebastian Krautheim, Ingmar Schumacher, Robert Solow, Holger Strulik and participants in the Sustainable Resource Use and Economic Dynamics (SURED) Conference, Ascona, June 2006, and an EPRU seminar, University of Copenhagen, April 2007. The activities of EPRU (Economic Policy Research Unit) are financed by a grant from The National Research Foundation of Denmark.
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Groth, C., Koch, KJ. & Steger, T.M. When economic growth is less than exponential. Econ Theory 44, 213–242 (2010). https://doi.org/10.1007/s00199-009-0480-y
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DOI: https://doi.org/10.1007/s00199-009-0480-y
Keywords
- Quasi-arithmetic growth
- Regular growth
- Semi-endogenous growth
- Knife-edge restrictions
- Learning by doing
- Embodied technical change