SFB 303 Discussion Paper No. A - 506
Author: Funk, Peter
Title: Endogenous Growth, Temporary Equilibrium and the Direction of Change
Abstract: This article studies the long-run direction of technological change in
an endogenous growth model. Development is modeled as a sequence of
temporary equilibria in an overlapping generations framework. We introduce a
concept of 'long-run efficient development' which excludes persistent
inefficiencies. The concept is much weaker than short-run or long-run
Pareto-efficiency and does not depend on our particular model. The main
theorem of the article gives conditions on agents' expectations and
preferences and on the evolution of innovation possibilities under which
equilibrium development, guided by current prices and profit expectations,
is long-run efficient.
Keywords: Endogenous Growth, Direction of Change, Temporary General Equilibrium,
Efficient Development
JEL-Classification-Number: D50, D60, O12, O30, O33
Creation-Date: January 1996
URL: ../1996/a/bonnsfa506.pdf"
SFB 303 Homepage
19.05.1998, Webmaster