EconStor >
Leibniz Universität Hannover >
Wirtschaftswissenschaftliche Fakultät, Universität Hannover >
Diskussionspapiere, Wirtschaftswissenschaftliche Fakultät, Universität Hannover >

Please use this identifier to cite or link to this item:

http://hdl.handle.net/10419/27214
  
Title:A Note on economic growth with subsistence consumption PDF Logo
Authors:Strulik, Holger
Issue Date:2008
Series/Report no.:Discussion papers // School of Economics and Management of the Hanover Leibniz University 405
Abstract:It is well known that the performance of simple models of economic growth improves substantially through the introduction of subsistence consumption. How to compute subsistence needs, however, is a difficult and controversially discussed issue. Here, I reconsider the linear (Ak) growth model with subsistence consumption and show that the evolution of savings rates and economic growth rates over time is independent from the size of subsistence needs. The model is thus more general and less subject to arbitrariness than it might have been thought initially. Quantitatively, it is shown that, although there is no degree of freedom to manipulate transitional dynamics, the model approximates the historical evolution of savings rates and growth rates reasonably well.
Subjects:Economic growth
saving
subsistence needs
JEL:O11
O41
D90
Document Type:Working Paper
Appears in Collections:Diskussionspapiere, Wirtschaftswissenschaftliche Fakultät, Universität Hannover

Files in This Item:
File Description SizeFormat
577069357.PDF146.11 kBAdobe PDF
No. of Downloads: Counter Stats
Download bibliographical data as: BibTeX
Share on:http://hdl.handle.net/10419/27214

Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.