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Ekkehart Schlicht
''The Golden Rule Without Marginal Productivities and Differential Rents: A Remark''
( 2017, Vol. 37 No.4 )
The “Golden Rule of Accumulation” characterizes the savings rate that entails the highest possible rate of per capita consumption in the long term. Any permanent change in the savings rate, be it an increase or a reduction, would eventually bring about lower per capita consumption. In the models studied, such a maximum was characterized by the equality of the savings rate and the profit rate or, equivalently, by a rate of interest being equal to the growth rate. The present note shows that the rule applies also to the hybrid model of endogenous growth proposed by Schlicht (2016).
Keywords: Golden Rule, Neoclassical theorem, optimal investment, optimal savings, technical progress function, marginal productivity theory, endogenous growth, hybrid growth model, capital deepening, technical progress function
JEL: O4 - Economic Growth and Aggregate Productivity: General
E1 - General Aggregative Models: General
Manuscript Received : Aug 01 2017 Manuscript Accepted : Nov 19 2017

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