Joan Robinson's growth model
From Wikipedia, the free encyclopedia
Joan Robinson's Growth Model is a simple model of economic growth, reflecting the working of a pure capitalist economy, expounded by Joan Robinson in her 1956 book The Accumulation of Capital.[1] However, The Accumulation of Capital was a terse book. In a later book, Essays in the theory of Economic Growth,[2][3] she tried to lower the degree of abstraction. Robinson presented her growth model in verbal terms. A mathematical formalization was later provided by Kenneth K. Kurihara.
This article needs additional citations for verification. (September 2011) |
Assumptions:[4]
- There is a laissez-faire closed economy.
- The factors of production are capital and labour only.
- There is neutral technical progress.
- There are only two classes: workers and capitalists, among whom the national income is distributed.
- Workers save nothing and spend their wage income on consumption.
- Capitalists consume nothing, but save and invest their entire income for capital formation.
- There is no change in the price level.
- Saving is a function of profit.