MITTELFRISTIGES WIRTSCHAFTLICHES WACHSTUM UND NEOKLASSISCHE WACHSTUMSTHEORIE

Abstract

SUMMARY All over the world governments and business firms demand ready tools for a rational economic policy. The target is more and more shifting from full employment to increasing wealth. The theory of economic growth is, therefore, of growing importance. It is an interesting question to ask whether the modern, especially the neoclassical theory of economic growth is capable of fulfilling the political requirements. The answer must be negative. The neoclassical theory of economic growth is developed essentially as a theory of long-run growth. Problems of medium-term growth which matter for economic policy, however, cannot be solved with its tools. First of all it is based on the substitutability between labour and capital; it is therefore impossible to state a surplus or a deficit in the factor supply. Secondly it is not satisfactory that economic growth is explained by the development of factor supply. In order to obtain a realistic theory of economic growth, one should start with production functions allowing limited substitutability; furthermore a theory of the factor demand should be developed, where the factor supply only has the effect of limiting the growth of output. This article is a contribution to a theory explaing the process of economic growth simultaneously by factor supply and factor demand.