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Modelling the growth process as a virtuous cycle
Journal article   Open access   Peer reviewed

Modelling the growth process as a virtuous cycle

William R J Alexander
Journal of Quantitative Economics, Vol.11(1&2), pp.323-328
2013
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Abstract

Applied Economics GDP economic growth cumulative circular causation
The standard neo-classical model of economic growth entails a rate of income growth proportional to the income gapyet,in the most dramatic periods of economic transformation, a process of cumulative circular causation could be expected to lead to accelerating growth. Modelling the rate of change of income growth, instead of income growth itself, as proportional to the income gap gives testable predictions concerning the inverse cosine of the income gap. Estimates of real GDP per capita for six Western European nations,for which GDP data are available over the period 1830 to 1913, conform to these predictions.

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