Neoclassical Theory Of Economic Growth Research Articles

Democracy and Delivery: The Rationalization of Local Government in South Africa

Introduction Following the demise of apartheid and the transition to democracy in 1994, South Africa has sought reintegration into the global economy. Reintegration has followed the ending of years of isolation and the lifting of sanctions imposed by the international community against the apartheid regime. The democratic government also recognized that South Africa’s prospects for economic growth — essential to achieve the government’s objectives of redistribution and poverty elimination — were inexorably linked to the country’s ability to position itself within the global economy (Abedian and Biggs, 1998). When the African National Congress (ANC)-led government first came to power in 1994 the party’s manifesto and the government’s key policy document was the Reconstruction and Development Programme (RDP) (African National Congress, 1994). The RDP sought to address the inequalities of apartheid and accelerate economic growth through government intervention in the economy. Rapid delivery of social goods, education, health care and housing were to be used as the basis to stimulate economic activity and job creation (Munslow and FitzGerald, 1997). By 1996 the RDP, while not abandoned as official government policy, was superceded by the Growth, Employment and Redistribution (GEAR) strategy as the government’s macro-economic framework. GEAR has been described by Nattrass as a neoclassical economic growth theory, with a Keynsian concern for investor confidence and an active and redistributive role for the state (Nattrass, 1999: 76). The switch from the RDP to GEAR represents a recognition of the inescapable influence of global economic forces as South Africa seeks to attract foreign investment and to promote exports (Pycroft, 1999). To be successful within the global economy, according to GEAR, requires a reduced budget deficit, marketoriented growth, fiscal discipline, labour-market flexibility and reduced government intervention — all of which reduce the government’s ability to influence poverty alleviation and income redistribution (Nattrass, 1999: 76–7). The results of the GEAR strategy to date have not been encouraging. Economic growth rates, job creation and inward investment have all been significantly lower than GEAR

Testing the Neoclassical Theory of Economic Growth: Evidence from Chinese Provinces

There has been renewed empirical work recently on testing the neoclassical model of economic growth using data on various groups of countries. But none of the cross-country regressions includes China, the largest developing economy in the world. This study utilises both cross-sectional and panel data on provinces of China over the reform period 1978–1995 to examine the extent to which the growth process in this country can be explained by the augmented Solow-Swan model. We found that in spite of restrictive assumptions used, the model provides a fairly good description of cross-sectional data. The levels and growth rates of GDP per capita are shown to be higher in regional economies with lower population growth, greater openness to foreign countries and more investment in physical and human capital. In addition, regional economies are shown to converge both conditionally and unconditionally over the reform period. However, the quantitative implications of the augmented Solow-Swan model are not borne out in panel data.

Social conflict and growth

Despite the predictions of the neoclassical theory of economic growth, we observe that poor countries have invested at lower rates and have not grown faster than rich countries. To explain these empirical regularities we provide a game-theoretic model of conflict between social groups over the distribution of income. Among all possible equilibria, we concentrate on those that are on the constrained Pareto frontier. We study how the level of wealth and the degree of inequality affects growth. We show how lower wealth can lead to lower growth and even to stagnation when the incentives to domestic accumulation are weakened by redistributive considerations.

Convergence or divergence? The impact of technology on ?why growth rates differ?

This paper presents an overview and assessment of the theoretical and empirical work on catch-up and growth, with particular emphasis on the impact of technology, and the consequences for developing countries. The point of departure is the neoclassical theory of economic growth, as laid out by Solow and others in the 1950s, and the applied work that followed (“growth accounting”). Then the contributions from economic historians and more heterodox economists, such as Schumpeter, Kaldor and others, are discussed, followed by an account of the most recent theoretical developments (“new growth theory”) and the empirical (econometric) work in this area.

Testing the Neoclassical Theory of Economic Growth: A Panel Data Approach

Recent empirical studies have examined the determinants of economic growth using country-average (cross-sectional) data. By contrast, this paper employs a technique for using a panel of cross-sectional and time series data for 98 countries over the 1960-85 period to determine the quantitative importance for economic growth of both country-specific and time-varying factors such as human capital, public investment, and outward-oriented trade policies. The empirical results support the view that these factors exert a positive and significant influence on growth. They also provide estimates of the speed at which the gap between the real per capita incomes of rich and poor countries is likely to be reduced over the longer term.

Testing the Neoclassical Theory of Economic Growth: A Panel Data Approach

Several recent empirical studies have examined determinants of economic growth using country average (cross-section) data. In contrast, this paper employs a technique for using a panel of both cross-section and time-series data for 98 industrial and developing countries over 1960-85 to determine the quantitative importance for economic growth of both country-specific and time-varying factors such as human capital, public investment, and outward-oriented trade policies. The empirical results provide support for the view that these factors exert a positive and significant influence on economic growth. They also provide estimates of the speed at which the gap in real per capita income between rich and poor countries is likely to be reduced over the longer term.

Energy Policy Modeling: A survey of general equilibrium approaches

Public concern about the economic impact of changing energy supply conditions has induced the development of energy-economy models based essentially on general equilibrium theory and the neoclassical theory of economic growth. These models are capable of elucidating the adjustment of energy consumption, through changes in factor proportions and sectoral output levels, resulting from changing energy prices. A survey of relevant simulation results suggests that quite dramatic changes in long-run energy consumption patterns can take place without a significant negative impact on economic growth.

Political Psychology and Neoclassical Theory of Economic Growth: The Possibilities and Implications of an Attempted Resynthesis

Contrary to reality, the traditional neoclassical/Keynesian economics assumes the actor's faith in the political system and thereby excludes antisystemic behavior from consideration. Exploring the historical reasons for the exclusion, this article brings together two important recent theoretical developments: (a) the sociopsychological inquiries into the systemic causes of sociopolitical instability and (b) the impact of sociopolitical instability on aggregate economic behavior. The theoretical and public policy implications of such an integrated model, based upon an expanded behavioral assumption of rational economic man, are postulated.

Wirtschaftswachstum bei stagnierender und schrumpfender Bevölkerung/Economic Growth with Zero Population Growth and with Declining Population

The effects of both zero population growth and a declining population on economic growth are considered. Although the neoclassical theory of economic growth leads to optimistic results in such cases, the author suggests that this theory cannot be used as a basis for political action. The need for further research into the economic effects of a stationary or declining population is stressed. (summary in ENG)

DAS ENDE EINER WACHSTUMSTHEORIE

The formal brilliance of the neoclassical theory of economic growth cannot compensate the fact that its definition of capital is not convincing. The objections Joan Robinson already made in 1953 have never been definitely cleared, whether by operating with a homogenous good to avoid the index number problem, nor with the surrogate production function Samuelson derivated from the neoclassical original production function. Joan Robinson's argument that the definition of capital is already presupposing the distribution of income which should be derivated thereof, is not covered by the index number problem; Samuelson's surrogate production function is only applicable with limited suppositions. Thus, two corner-stones fall out of the neoclassical structure: (1) capital is no given amount of a factor but its value depends on wage-rate, labour input and gestation period of investment. This will withdraw the basis of the neoclassical axiom, i.e. that supply of factors determines the growth over the system of relative prices. The choice of the most profitable technique will be the key instrument of growth theory. (2) Distribution of income cannot be derivated from a production theoretical context, either of the factor prices must be determined exogenously. How this is done, will be a problem of political economy.

DIE ÖKONOMISCHE THEORIE ALS INSTRUMENT DER ENTWICKLUNGSPOLITIK*

SUMMARY The traditional economic theory seems to be appropriate to evaluate the economic conditions in underdeveloped countries. However, as the propositions for development policies diverge, neither the classical equilibrium-analysis nor the Harrod-Domar theory of economic growth are very useful for a long-term development policy. The present article shows, where modern economic theory is helpful in performing rational development policies, and where for scientific reasons its feasibility remains limited. Where models of the recent theory of economic growth are used, a time-preference-function or a general objective-function must be introduced; models of the neoclassical theory of economic growth can be used without these functions. As soon as the function is maximized under constraints, a programming problem results. As can be seen here, economic planning is nothing but a special case of economic programming: every consistent development plan can be explained in terms of a decision model derived from the numerical values of the endogenous variables. As it is impossible to formulate a target-function, the problem must be solved by the conflict-models of the theory of games. These methods render the definition of optimal allocation-processes in economic planning feasible. But application to non-repetitive events is impossible; then propositions for rational behaviour have to be given by the methods of heuristic programming. Economic theory is only applicable to repeated events. The increasing specialization in all fields of science leads, as recent developments show, to a strong differentiation of the scopes of objects; on the other hand, the methods of solving problems converge remarkably. Concerning the methodologies, the dissimilarities between arts and sciences today are largely eliminated.

MITTELFRISTIGES WIRTSCHAFTLICHES WACHSTUM UND NEOKLASSISCHE WACHSTUMSTHEORIE

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.

Biased Technical Progress and a Neoclassical Theory of Economic Growth

I. Introduction, 129. — II. A Neoclassical growth model, 130. — III. Properties of an equilibrium growth path, 132. — IV. Stability conditions, 133.— V. Induced inventions, 135. — Appendix, 137.

Recent Contributions to the Theory of Economic Growth

The theory of economic growth is concerned with the behaviour over time of the major economic aggregates—among them consumption and investment, wages and profits. At the present time growth theory is the field of a methodological dispute between the so-called “neo-classical” and “neo-Keynesian” schools of thought. In this paper, in the course of a brief consideration of recent major works in this area, an attempt is made to discover the nature of the disagreement.Let us begin with Meade's Neo-classical Theory of Economic Growth. In a lucid introductory chapter, the assumptions common to the two sides in the dispute are set forth. We are to consider a closed economy, with no government expenditure or taxation. There are two types of goods: machines and a homogeneous consumption good, each produced by means of machines and labour (and perhaps land). The assumption of competitive conditions throughout the economy is interpreted somewhat differently by different authors. To Mrs. Robinson in her Essays (p. 8), it means that in long-run equilibrium a uniform rate of profit rules in all sectors of the economy. To Meade it means, in addition, that each factor of production receives as payment the value of its marginal product.

A Neo-Classical Theory of Economic Growth.

Journal Article A Neo-Classical Theory of Economic Growth Get access A Neo-Classical Theory of Economic Growth. By J. E. Meade. (London: Allen and Unwin, 1961. Pp. ix + 146. 25s.) J. R. Hicks J. R. Hicks All Souls College, Oxford Search for other works by this author on: Oxford Academic Google Scholar The Economic Journal, Volume 72, Issue 286, 1 June 1962, Pages 371–374, https://doi.org/10.2307/2228676 Published: 01 June 1962

Professor Meade on Economic Growth1

EconomicaVolume 29, Issue 113 p. 72-86 Article Professor Meade on Economic Growth1 George H. Borts, George H. Borts Brown University, Providence, R.I.Search for more papers by this author George H. Borts, George H. Borts Brown University, Providence, R.I.Search for more papers by this author First published: 01 February 1962 https://doi.org/10.1111/j.1468-0335.1962.tb00009.x A Neo-classical Theory of Economic Growth, by J. E. Meade. George Allen & Unwin Ltd., 1961, pp. ix + 146. 25s. Grateful acknowledgment is due to Dr. E. J. Mishan for assistance and suggestions. Read the full textAboutPDF ToolsRequest permissionExport citationAdd to favoritesTrack citation ShareShare Give accessShare full text accessShare full-text accessPlease review our Terms and Conditions of Use and check box below to share full-text version of article.I have read and accept the Wiley Online Library Terms and Conditions of UseShareable LinkUse the link below to share a full-text version of this article with your friends and colleagues. Learn more.Copy URL Volume29, Issue113February 1962Pages 72-86 RelatedInformation

A Neo-Classical Theory of Economic Growth. J. E. Meade

<i>A Neo-Classical Theory of Economic Growth</i>. J. E. Meade

A Neo-Classical Theory of Economic Growth

A Neo-Classical Theory of Economic Growth