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Existence and Stability of Steady State in an Augmented Solow Model with Multiple Capital Goods |
Jian Li1(), Yao Lu2 |
1. School of Economics, Nanjing University, Nanjing 210093, China 2. School of Economics, Nanjing University, Nanjing 210093, China |
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Abstract This paper relaxes two assumptions on the traditional augmented Solow model: strict concavity of production functions and dual capital goods. It generalizes traditional conclusions of the Solow model by demonstrating that neoclassical properties of a production function are sufficient for the existence and global stability of the steady state in the augmented Solow model with multiple capital goods. Moreover, we prove necessity of essentiality of inputs for a neoclassical production function and generalize the golden rule of capital accumulation.
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Keywords
multiple capital goods
augmented Solow model
essentiality of inputs
steady state
strict concavity
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Issue Date: 03 January 2019
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