01704cam a22002417 4500001000600000003000500006005001700011008004100028100002000069245011300089260006600202490004100268500001900309520064500328530006100973538007201034538003601106690012901142710004201271830007601313856003701389856003601426w8635NBER20150129082441.0150129s2001 mau||||fs|||| 000 0 eng d1 aAbel, Andrew B.10aOn the Invariance of the Rate of Return to Convex Adjustment Costsh[electronic resource] /cAndrew B. Abel. aCambridge, Mass.bNational Bureau of Economic Researchc2001.1 aNBER working paper seriesvno. w8635 aDecember 2001.3 aThe Modified Golden Rule, which relates the rate of return on capital and the growth rate of the capital stock along long-run growth paths that maximize the utility of a representative infinitely-lived consumer, is invariant to the introduction of convex capital adjustment costs. Therefore, along balanced growth paths in neoclassical optimal growth models with an exogenous long-run growth rate of capital, the rate of return is invariant to the introduction of convex adjustment costs, though the capital-labor ratio is reduced along such paths. In AK models, convex adjustment costs reduce the growth rate and rate of return on capital. aHardcopy version available to institutional subscribers. aSystem requirements: Adobe [Acrobat] Reader required for PDF files. aMode of access: World Wide Web. 7aE2 - Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy2Journal of Economic Literature class.2 aNational Bureau of Economic Research. 0aWorking Paper Series (National Bureau of Economic Research)vno. w8635.4 uhttp://www.nber.org/papers/w863541uhttp://dx.doi.org/10.3386/w8635