Autore
Mahadeva, Lavan

Titolo
Endogeneous growth with a declining rate of interest
Periodico
European University Institute of Badia Fiesolana (Fi). Department of Economics - Working papers
Anno: 1997 - Fascicolo: 34 - Pagina iniziale: 1 - Pagina finale: 15

This article shows that endogenous growth in capital is compatible with a decreasing rate of interest when investment is entirely financed by the earnings of the young and when there is an externality effect of capital on the productivity of their labour. And despite the presence of this externality effect, the demand curve for capital is downward sloping. So a decreasing rate of interest along a transition path can no longer be taken as invalidating endogenous growth and endogenous growth models do not necessarily imply upward sloping demand curves.



Testo completo: http://hdl.handle.net/1814/643

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