This chapter provides an overview of the literature on neoclassical growth, starting with the simple Solow-Swan model and highlighting the main components of the neoclassical growth process. It considers the assumptions, predictions, and limitations of the Solow-Swan model and discusses several extensions that address some of these limitations and, in particular, those that are unrealistic for a regional growth setting. Several more complex models are presented and discussed, including a model that allows for exogenous technological progress, one that includes a broader definition of capital to also encompass human capital, and one that relaxes the assumption of a closed economy. Finally, the chapter considers a more complex model of neoclassical growth, the Ramsey-Cass-Koopmans model, which incorporates consumer behavior and allows for an endogenously determined savings rate.
Human Capital Gross Domestic Product Capital Stock Technological Progress Saving Rate
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.
This is a preview of subscription content, log in to check access
Abreu M, De Groot HLF, Florax RJGM (2005) A meta-analysis of β-convergence: the legendary 2%. J Econ Surv 19(3):389–420CrossRefGoogle Scholar
Acemoglu D (2009) Introduction to modern economic growth. Princeton University Press, PrincetonGoogle Scholar