Stability Of Growth Equilibrium Research Articles

Money, Growth and Stability.

This sequel to Frank Hahn's Equilibrium and Macroeconomics presents his theoretical work published over the past thirty years. The twentyone contributions have been selected on the basis of their relevance to current economic debate, and they comprise some of Hahn's most widely cited and influential essays.Organized in five parts - Money, Non-Walrasian Equilibria, Stability, Growth, and Miscellaneous - most of the essays concentrate on monetary theory and economic dynamics (or stability). the first instance, Hahn shows that classical Arrow-Debreu general equilibrium theory cannot be used for monetary theory. A reconstruction of this theory turns out to have some surprising welfare economics implications. Concerning dynamics, Hahn's main preoccupations are with price dynamics that allow trading at false prices and with the stability of growth equilibrium with heterogeneous capital goods, which remains important to current theorizing on rational expectations equilibria.The remaining essays cover a variety of topics such as the influence of uncertainty on savings and excess capacity in imperfect competition. The book also includes an introduction by Hahn commenting on each essay, and his Jevons Lecture, In Praise of Economic Theory.Frank Hahn is Professor of Economics at the University of Cambridge and the author of Equilibrium and Macroeconomics (MIT Press 1985) and Money and Inflation (an MIT Press paperback).

The Theory of Saving and the Stability of Growth Equilibrium

I. Introduction and summary of main conclusions, 491. — II. The structure of an aggregate economy, 493. — III. The general saving function and the existence of the steady-state growth path, 494. — IV. Uniqueness and stability of the steady-state growth path, 498.

Stability of Growth Equilibrium in a Neoclassical Vintage Model

IN A RECENT PAPER Solow, Tobin, Weizsacker and Yaari [4] have analyzed the properties of growth equilibria in a one-sector, vintage capital model with a fixed machine-output ratio and with a labor-machine ratio that is an exogenously given, exponentially decreasing function of time. Given constant rates of labor growth and of saving, they have shown that any path of growth equilibrium, starting with an arbitrary capital composition and labor force, converges asymptotically to a unique balanced growth path (whenever such path exists), in which the vintage distribution of capital remains stationary. Previously, Phelps [2] and Uzawa [6] have established the same result for a certain class of neoclassical vintage models in which variation in the amount of labor per unit of capital along some production function is possible at all times (ex-ante as well as eX-poSt).2 This class includes all those production functions for which it never pays to scrap old machines entirely prior to their expiration through wear and tear.3 A member of this class is the CobbDouglas function.4 In this paper we are interested in extending the above result to a neoclassical vintage model in which the length of life of machines (written m) is an economic variable that is determined by equibrium conditions. A condition for balanced growth is now that m should be constant over time. We shall prove that along any growth equilibrium path, m converges asymptotically to its corresponding balanced growth value. As our proof is based to a large extent on that in [4], the argument is presented in outline, rather than complete.

über die Theorie des Wirtschaftlichen Wachstums und Ihre Bedeutung

The study is devoted to the theory of economic growth and its relevance to pure and applied theory. It is maintained that by trying to explain the development of the factors of production the theory of growth represents an important generalization of the static theory of general equilibrium. The main conceptual categories and specific methods of growth theory are shown to be the examination of the existence and stability of growth equilibrium and of comparative dynamics. As far as applied theory is concerned the principle conclusions are the following: economic models devised to explain a country's economic development should be based on the theory of growth rather than on an entirely Keynesian business cycle approach. This does not seem to be generally realised, since the majority of macro-economic models is of basically Keynesian nature. On the other hand the theory of growth needs to be supplemented by a theory of business cycles, because the actual economic development exhibits growth as well as fluctuations. Although great stress is laid on the essential role of the growth theory in any attempt to explain a country's economic development, it is doubted whether the theory can as yet be usefully applied to practical situations. There remain a number of unsolved problems (of measurement etc.) typically connected with the theory of economic growth. While this may, for the time being, prevent the theory from being put to practical use, it in no way affects its basic validity.

Investment in Fixed Capital and the Stability of Growth Equilibrium

Investment in Fixed Capital and the Stability of Growth Equilibrium

Equilibrium Growth in the International Economy

I. The basic model, 455. — II. Analysis of global stability of growth equilibrium when both countries are incompletely specialized, 459. — III. Analysis of global stability of growth equilibrium when both countries are completely specialized, 463.

The Stability of Growth Equilibrium]: Reply

The Stability of Growth Equilibrium]: Reply

Neutral Inventions and the Stability of Growth Equilibrium

Neutral Inventions and the Stability of Growth Equilibrium* H. Uzawa H. Uzawa University of California, Berkeley, and Stanford University Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 28, Issue 2, February 1961, Pages 117–124, https://doi.org/10.2307/2295709 Published: 01 February 1961

The Stability of Growth Equilibrium

Introduction, 206. — I. Statement of the problem, 209; growth equilibrium formulated, 210; the Solow case, 212. — II. Model A. Continuous full employment, the Wicksell case, 213. — III. Model B. Unemployment permitted, 219; the stabilizing effects of redistribution, 221; the stabilizing effect of changing money wages and changing interest rates, 223. — IV. Model C. The Keynesian assumptions, 224.

Equilibrium Growth in an International Economy

In recent years Keynesian theory has been extended to the analysis of economic growth by the introduction of a relation between investment and productive capacity to supplement the Keynesian relation between investment and effective demand. Combination of the two relations permits the specification of an equilibrium rate of growth, defined as that rate of growth which maintains full employment of capacity. So far, however, except for some rather brief compients by Mr. Harrod, the development of this model has been largely confined to a closed economy. It is the purpose of this article to extend the model to a two-country international economy, and to deduce certain conclusions about equilibrium growth in such an economy. The analysis proceeds from consideration of an open economy, the rate of expansion of demand for whose exports is given, to consideration of a two-country closed system; and from the assumption that balance-of-payments equilibrium is preserved by international lending and borrowing (Part I) to the assumption that it is preserved by exchange rate adjustment (Part II). No attempt is made to deal with the stability of growth equilibrium and the results of departures from it; because of this, and because of the extremely simple assumptions on which the analysis is conducted, the conclusions derived are of limited practical application. Nevertheless, it is hoped that they may have some usefulness as a logical frame of reference for discussion of international growth problems.