PL EN


2007 | 18 | 1-2 | 9-31
Article title

SCALE EFFECTS AND ECONOMIC GROWTH

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Languages of publication
PL
Abstracts
EN
The paper focuses on the neoclassical production function and its influence on the economic growth model proposed by N. Gregory Mankiw, David Romer and David N. Weil (1992) The model is an expanded version of the traditional neoclassical model developed by Robert M. Solow (1956). In the context of the production function, the author examines the influence of scale effects on long-term growth and basic macroeconomic variables such as output, physical capital, human capital and consumption per worker. He also reviews scale effects in terms of Edmund S. Phelps' golden rules of capital accumulation (1961, 1966). The analysis includes differential equations of the type used by Bernoulli and Riccati to describe increases in physical and human capital stock per unit of effective labor (in the case of constant scale effects) and increases in capital stock growth rates (in the case of decreasing and growing scale effects). The paper ends with a number of important conclusions. First, under constant scale effects, the long-term rates of growth for basic macroeconomic variables are equal to the rate of Harrod-neutral technological progress (which is an exogenous variable in the Mankiw-Romer-Weil model). Second, under decreasing/growing scale effects, these rates are lower/higher than the rate of Harrod-neutral technological progress. Third, repealing the constant-scale-effects assumption in the Mankiw-Romer-Weil growth model does not change the golden rules of capital accumulation because, regardless of whether scale effects decrease, grow or are constant, the golden rule of accumulation holds that the structure of investment rates corresponds to the elasticities of output with regard to physical and human capital inputs.
Year
Volume
18
Issue
1-2
Pages
9-31
Physical description
Document type
ARTICLE
Contributors
author
  • T. Tokarski, Uniwersytet Jagiellonski, Instytut Ekonomiki i Zarzadzania, ul. Gronostajowa 3, 33-350 Krak√≥w, Poland
References
Document Type
Publication order reference
Identifiers
CEJSH db identifier
07PLAAAA02254716
YADDA identifier
bwmeta1.element.2e40a9e2-4ba6-30c6-ab83-75a9ad7470c1
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