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On the economic growth theory with Kadiyala production function
- Publication Year :
- 2018
- Publisher :
- Elsevier B.V., 2018.
-
Abstract
- We study the discrete time neoclassical one-sector growth model with differential savings while assuming Kadiyala production function which shows a variable elasticity of substitution symmetric with respect to capital and labor. We show that, if workers save more than shareholders, then the growth path is bounded from above and the boundary is independent from the savings rate of shareholders. Moreover, the growth path for non-developed countries is influenced only by the savings rate of shareholders while level of capital per capita of developed economies is influenced by the savings rate of workers. We also show that multistability phenomena may occur so that the model is able to explain co-existence of under-developed, developing and developed economies. We prove that fluctuations and complex dynamics may arise when the elasticity of substitution between production factors is lower than one and shareholders save more than workers.
- Subjects :
- Numerical Analysis
Elasticity of substitution
Applied Mathematics
05 social sciences
Factors of production
Differential (mechanical device)
Economic growth dynamics
01 natural sciences
010101 applied mathematics
Variable (computer science)
Differential savings
Economic growth
VES
Modeling and Simulation
Shareholder
Capital (economics)
0502 economics and business
Econometrics
Per capita
Economics
Production (economics)
050207 economics
0101 mathematics
Subjects
Details
- Language :
- English
- Database :
- OpenAIRE
- Accession number :
- edsair.doi.dedup.....46e6784bfe5ca3ce9d50308839f8e9eb