TY  - JOUR
AU  - Jones,Larry E.
AU  - Manuelli,Rodolfo
TI  - A Convex Model of Equilibrium Growth
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 3241
PY  - 1990
Y2  - January 1990
UR  - http://www.nber.org/papers/w3241
L1  - http://www.nber.org/papers/w3241.pdf
N1  - Author contact info:
Larry E. Jones
Department of Economics
University of Minnesota
4-101 Hanson Hall
1925 Fourth Street South
Minneapolis, MN 55455
Tel: 612/624-4553
Fax: 612/624-0209
E-Mail: lej@umn.edu

Rodolfo Manuelli
Department of Economics
Washington University in St. Louis
Campus Box 1208;
St. Louis MO 63130-4899
Tel: 608/263-3877
Fax: 608/262-2033;608/263-3876
E-Mail: manuelli@artsci.wustl.edu
AB  - Our aim in this paper is to exposit a convex model of equilibrium growth. The model is strictly in the Solow tradition. The model has two features which distinguish it from most other work on the subject. These are, first, that the model is convex on the technological side and, eecond, that fixed fatten are explicitly included. The difference between our model and the standard single sector growth model lies in the fact that the marginal product of capital does not converge to zero as the level of inputs go to infinity. Existence and characterization results are provided along with some preliminary analyses of taxation and international trade policies. It is shown that the long-run growth rate in per capita consumption depends, in the natural way, on the parameters describing tastes and technology. Finally, it is shown that some policies have growth effects while others affect only levels. It is demonstrated that in a free trade equilibrium with taxation national growth rates of consumption and output need not converge.
ER  -