TITLE:
A Dynamic General Equilibrium Model Satisfying Golden Rule in Neoclassical Growth Theory
AUTHORS:
Jiang Wei, Kangping Wu, Xuanming Ni
KEYWORDS:
Economic Growth, Dynamic General Equilibrium, Golden Rule
JOURNAL NAME:
Theoretical Economics Letters,
Vol.7 No.4,
June
19,
2017
ABSTRACT: This paper constructs a model which is more close to
the reality to describe individual saving behavior accurately and explain the
long-term growth of economy. The model constructed in this paper is the
improvement and innovation of neoclassical growth models including Solow model,
RCK model and OLG model. Starting from the micro decision making of individuals
and firms, there exists balanced growth path (BGP) and capital stock in steady
state satisfies the golden rule in general equilibrium. Total saving rate
equals the elasticity of output with respect to capital. The long-term economic
growth depends on exogenous technological progress.