An Integration of Neoclassical Growth Theory and Economic Structural Change with Monopolistic Competition Theory

Wealth accumulation is a deterministic factor mechanism of national economic growth. Neoclassical growth theory is basically concerned with capital and wealth accumulation in perfectly competitive market. Global markets are characterized by a great variety of markets. Nevertheless, there only a few rigorous models of wealth accumulation with other types of markets within neoclassical growth framework. This study attempts to contribute literature of economic growth by introducing monopolistic competition and monopoly into neoclassical growth theory. The model is based on a few well-established economic theories. The model is constructed within framework of the Solow-Uzawa two-sector neoclassical growth model. The description of to monopolistic competition is influenced by the Dixit-Stiglitz model of monopolistic competition. The modelling of monopoly is based on monopoly theory. We model behavior of the household with Zhang’s utility function and concepts of current income and disposable income. The unique contribution of this research is to integrate these theories in a comprehensive framework. We construct the basic model and then analyze properties of the model. The existence of a unique equilibrium point is identified by simulation. The effects of changes in some parameters comparative static analyses in some parameters.

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Monopolies and perfect competition in Solow–Uzawa’s general equilibrium growth model

Russian Journal of Industrial Economics ◽

10.17073/2072-1633-2019-4-405-415 ◽

2020 ◽

Vol 12 (4) ◽

pp. 405-415

Author(s):

Wei-Bin Zhang

Keyword(s):

Economic Growth ◽

Growth Model ◽

Perfect Competition ◽

Growth Theory ◽

Unique Contribution ◽

Homogeneous Population ◽

Market Structures ◽

Neoclassical Growth Theory ◽

Equilibrium Growth ◽

Neoclassical Growth

The purpose of this study is to introduce monopolies to neoclassical growth theory. This unique contribution attempts to make neoclassical economic growth theory more realistic in modelling the complexity of economic growth and development with different types of market structures. This study is based on a few well-established economic theories in the literature of economics. We frame the model on basis of the Solow–Uzawa two-sector growth model. The modelling of monopoly is based on well-developed monopoly theory. We model behavior of the household with Zhang’s concept of disposable income and utility function. The model endogenously determines profits of monopolies which are equally distributed among the homogeneous population. We build the model and then identify the existence of an equilibrium point by simulation. We conduct comparative static analyses in some parameters.

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Endogenous growth theory and regional development policy

Spatium ◽

10.2298/spat1534010c ◽

2015 ◽

pp. 10-17

Author(s):

Slobodan Cvetanovic ◽

Milorad Filipovic ◽

Miroljub Nikolic ◽

Dusko Belovic

Keyword(s):

Economic Growth ◽

Regional Development ◽

Endogenous Growth ◽

Driving Forces ◽

Growth Theory ◽

Regional Competitiveness ◽

Endogenous Growth Theory ◽

Neoclassical Growth Theory ◽

Neoclassical Growth

The numerous versions of endogenous explanations of economic growth emphasize the importance of technological change driving forces, as well as the existence of appropriate institutional arrangements. Endogenous growth theory contributes to a better understanding of various experiences with long-term growth of countries and regions. It changes the key assumptions of the Neoclassical growth theory and participates in the modern regional development physiology explanation. Based on these conclusions, the paper: a) explicates the most important theoretical postulates of the theory, b) explains the most important factors of economic growth in the regions in light of the Endogenous growth theory messages and c) emphasizes the key determinants of regional competitiveness which in our view is conceptually between the phenomena of micro- and macro-competitiveness and represents their necessary and unique connection. First of all, micro-competitiveness is transformed into a regional competitiveness; then regional competitiveness is transformed into a macro-competitiveness. In turn, macro - influences the microeconomic competitiveness, and the circle is closed. After that, the process starts over again.

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Economic Growth and Inequality with Tourism in an Integrated Walrasian-General Equilibrium and Neoclassical-Growth Theory

Zagreb International Review of Economics and Business ◽

10.2478/zireb-2018-0002 ◽

2018 ◽

Vol 21 (1) ◽

pp. 17-36

Author(s):

Wei-Bin Zhang

Keyword(s):

Economic Growth ◽

General Equilibrium ◽

Open Economy ◽

Nonlinear Differential Equations ◽

Small Open Economy ◽

Growth Theory ◽

Traded Goods ◽

The Rich ◽

Neoclassical Growth Theory ◽

Neoclassical Growth

Abstract This paper studies dynamic interdependence between economic growth, tourism, and inequalities in income and wealth in a small open economy. We build the dynamic model in an integrated Walrasian-general equilibrium and neoclassical-growth theory for a small open economy with multiple sectors and heterogeneous households in a perfectly competitive economy. The economy consists of one service sector which supplies non-traded services and one industrial sector which produces traded goods. We treat wealth accumulation and land distribution between housing and supply of services as endogenous variables. We show that the motion of the economy with J types of households is given by J nonlinear differential equations. We simulate the motion of the system with three groups of households. We also conduct comparative dynamic analysis with regards to the rate of interest, the price elasticity of tourism, the global economic condition, and the rich class’ human capital, and the rich class’ propensity to consume housing.

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Economic growth with space and fiscal policies with housing and public goods

Journal of Economic Studies ◽

10.1108/01443581111160897 ◽

2011 ◽

Vol 38 (4) ◽

pp. 452-482 ◽

Cited By ~ 1

Author(s):

Wei‐Bin Zhang

Keyword(s):

Economic Growth ◽

Public Goods ◽

Economic Geography ◽

Growth Theory ◽

Local Public Goods ◽

Dynamic Interactions ◽

Content Type ◽

Neoclassical Growth Theory ◽

Neoclassical Growth ◽

Over Time

PurposeThis study aims to examine dynamic interactions among economic growth, geography and the housing market with public goods financed by the government. A general dynamic equilibrium model of an isolated economy with economic geography, local public goods and capital accumulation is to be constructed. The economy has three sectors, supplying industrial goods, housing, and local public goods. The model synthesizes the main ideas in neoclassical growth theory, the Alonso urban model, and the Muth housing model in an alternative framework to the traditional growth theory.Design/methodology/approachThe model is based on the neoclassical growth theory with an alternative approach to household behavior. The paper shows how to solve the dynamics of the economic system and simulate the model to demonstrate dynamic interactions among economic growth, housing market, residential distribution and public goods over time and space.FindingsThe paper simulates equilibrium and motion of the spatial economy with Cobb‐Douglas production and utility functions. The simulation demonstrates, for example, that, as the tax rate on the land income is increased, the total capital stocks and the stocks employed by the three sectors are increased, the rate of interest falls and the output of the industrial sector and the wage rate are increased, the land devoted to local public goods falls and the land rent and housing rent rise over space, the consumption level of the industrial goods and the total expenditures on the public goods are increased.Practical implicationsThe paper provides some possible implications of the model for complicated consequences of government policy over time and space. In particular, the paper shows that a change in government policy not only has a macroeconomic impact over time, but also affects the economic geography of the national economy.Originality/valueThe paper offers insights into the linkage among growth, national public policies and economic geography.

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ELEMENTS OF THE NEOCLASSICAL GROWTH THEORY

STUDIES AND SCIENTIFIC RESEARCHES ECONOMICS EDITION ◽

10.29358/sceco.v0i20.296 ◽

2014 ◽

Author(s):

Florina Popa

Keyword(s):

Economic Growth ◽

Growth Model ◽

Technical Progress ◽

Capital Accumulation ◽

Growth Theory ◽

Economic Science ◽

Growth Phenomenon ◽

New Guidelines ◽

Neoclassical Growth Theory ◽

Neoclassical Growth

One of the relevant components of the contemporary economic science is the economic growth theory, the economic background of the time leading to new guidelines of the research. The neoclassical growth theory - the core of modern analysis - explains how the capital accumulation and technological changes affect the economy, significant for the analysis of the economic growth process being the Solow’s neoclassical growth model. The paper brief describes the elements of the economic growth model developed by Solow, both for the situation when it allows the explanation of extensive growth and that wherein the growth is of intensive nature, as a result of the intervention of exogenous technical progress – a determinant of factors productivity growth. It is highlighted the importance of the exogenous neoclassical model, proposed by Solow, who showed the determinant role of the technical progress in the economic growth phenomenon.

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Introduction: Chris Freeman’s “History, Co-Evolution and Economic Growth”: an affectionate reappraisal

Industrial and Corporate Change ◽

10.1093/icc/dtaa016 ◽

2020 ◽

Vol 29 (4) ◽

pp. 1021-1034

Author(s):

Giovanni Dosi ◽

Alessandro Nuvolari

Keyword(s):

Economic Growth ◽

Institutional Change ◽

Technical Change ◽

Growth Theory ◽

Basic Assumptions ◽

Long Run ◽

Starting Point ◽

Real Progress ◽

Neoclassical Growth Theory ◽

Neoclassical Growth

Abstract We maintain that Chris Freeman’s approach to the study of the interplay between technical change and economic growth is still a very fertile source of insights. Alas, in much of mainstream research Freeman’s contribution is hardly considered. We show that this is a result of the basic assumptions of neoclassical growth theory (both “old” and “new”) that prevent a pregnant treatment of technical and institutional change. We conclude that if we want to make real progress with understanding the long-run dynamics of capitalist systems, Freeman’s “reasoned history” is an invaluable starting point.

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DOES FOREIGN DIRECT INVESTMENT IMPROVE ECONOMIC GROWTH IN CEMAC COUNTRIES?

European Journal of Business and Economics ◽

10.12955/ejbe.v8i2.407 ◽

2013 ◽

Vol 8 (2) ◽

Author(s):

EMMANUEL BRUNO ONGO NKOA

Keyword(s):

Economic Growth ◽

Positive Impact ◽

Raw Materials ◽

Research Work ◽

Growth Theory ◽

The Past ◽

The Impact ◽

Neoclassical Growth Theory ◽

Neoclassical Growth ◽

Selection Of

The aim of this research work is to assess the influence of FDI on economic growth in the CEMAC region. The ratio of FDIs in the actual GDP of countries of the CEMAC region has recorded a steady annual increase for the past three decades. Moreover, the high variability of FDI, given the various crises and fluctuations in the prices of raw materials invites us to reflect and question the impact of FDI on growth by studying the case of CEMAC countries. The theoretical analysis is based on the neoclassical growth theory and its extensions. After the selection of a model crafted from Imoudu (2012) and Boreinsztein et al. (1998). The results show that FDI have a positive impact on the growth of the sub-region and these are conveyed by human capital.

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Capital Accumulation, Technological Progress and Environmental Change in a Three-Sector Growth Model

International Journal of Information Systems and Social Change ◽

10.4018/jissc.2012070101 ◽

2012 ◽

Vol 3 (3) ◽

pp. 1-18

Author(s):

Wei-Bin Zhang

Keyword(s):

Environmental Change ◽

Technological Change ◽

Growth Model ◽

Equilibrium Points ◽

Perfect Competition ◽

Environmental Taxes ◽

Growth Theory ◽

Wealth Accumulation ◽

Neoclassical Growth Theory ◽

Neoclassical Growth

This paper builds a dynamic growth model with wealth accumulation, technological change, and environmental change on the basis of the neoclassical growth theory with an alternative approach to household behavior. The model synthesizes the economic growth mechanism in the neoclassical growth theory, Arrow’s learning-by-doing, and the environmental change in some traditional dynamic models of environmental economics. It describes a dynamic interdependence among wealth accumulation, technological change, and environmental change under perfect competition with environmental taxes. The author simulated the model to demonstrate existence of equilibrium points and motion of the dynamic system. In particular, the author demonstrated effects of changes in the government policy and preference upon both short-run and long-run economic behavior of the system.

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