When Economic Growth is Less than Exponential

TY - UNPB

T1 - When Economic Growth is Less than Exponential

AU - Groth, Christian

AU - Koch, Karl-Josef

AU - Steger, Thomas M.

N1 - JEL Classification: O31, O40, O41

PY - 2009

Y1 - 2009

N2 - This paper argues that growth theory needs a more general notion of "regularity" than that of exponential growth. We suggest that paths along which the rate of decline of the growth rate is proportional to the growth rate itself deserve attention. This opens up for considering a richer set of parameter combinations than in standard growth models. And it avoids the usual oversimplistic dichotomy of either exponential growth or stagnation. Allowing zero population growth in three different growth models (the Jones R&D-based model, a learning-by-doing model, and an embodied technical change model) serve as illustrations that a continuum of "regular" growth processes fill the whole range between exponential growth and complete stagnation.

AB - This paper argues that growth theory needs a more general notion of "regularity" than that of exponential growth. We suggest that paths along which the rate of decline of the growth rate is proportional to the growth rate itself deserve attention. This opens up for considering a richer set of parameter combinations than in standard growth models. And it avoids the usual oversimplistic dichotomy of either exponential growth or stagnation. Allowing zero population growth in three different growth models (the Jones R&D-based model, a learning-by-doing model, and an embodied technical change model) serve as illustrations that a continuum of "regular" growth processes fill the whole range between exponential growth and complete stagnation.

M3 - Working paper

BT - When Economic Growth is Less than Exponential

PB - Economic Policy Research Unit. Department of Economics, University of Copenhagen

ER -