Publisher:
Universität Siegen, Fakultät III, Wirtschaftswissenschaften, Wirtschaftsinformatik und Wirtschaftsrecht, Siegen
Abstract:
It is argued that due to their general instability dynamic optimization models cannot be used as positive theories of economic growth. The argument is substantiated by (numerical) examples. A simple rule of thumb is provided as an alternative to the RKC model. This rule is shown to perform well from a normativeand to be reasonable from a positive point of view. The model is consistent with empirically estimated rates of convergence if a broad concept of capital is used.