Abstract
In the AK model of growth, a country’s output per capita grows linearly with investment as a percentage of GDP. The model predicts that changes in policies that affect the investment rate should in turn affect growth rates, given a fixed capital-output ratio and depreciation, allowing an endogenous form of growth. The theory thus requires fundamental similarity in the dynamics of economic growth and investment rates for an economy.
Contributed by Dr. Ishita Nandi, Department of Economics, University of California, Santa Barbara
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© 2011 Jati K. Sengupta
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Sengupta, J.K. (2011). Time Series Tests of the AK Model of Endogenous Growth. In: Technology, Innovations and Growth. Palgrave Macmillan, London. https://doi.org/10.1057/9780230295254_6
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DOI: https://doi.org/10.1057/9780230295254_6
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