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On capital, increasing returns and long-run growth in a model of overlapping generations

Published online by Cambridge University Press:  17 August 2016

Jean-Pierre Drugeon
Jean-Pierre Drugeon*
Affiliation:
C.n.r.s. – M.a.d.
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Summary

This contribution illustrates the role of an imperfectly competitive process of capital accumulation in the growth process. It emphasizes the central role of investment in long-run outcomes. Whereas the final good sector is characterized by perfect competition, temporary monopolies take place in the capital goods ones. These monopolies rest on an increasing returns property in the production technology that in turn results from dynamic intrasectoral externalities. The model is characterized by a sustained long-run growth path at a constant rate. This solution departs from the ones that have emerged in the recent literature because the growth rate of the capital stock and the growth rate of knowledge are not identical.

Résumé

Résumé

Cet article fournit souligne le rôle d'un processus d'accumulation du capital reposant sur des schémas de concurrence imparfaite dans une perspective de croissance. Alors que le secteur de production du bien final est gouverné par un régime de concurrence parfaite, la concurrence pure et parfaite prévaut dans les secteurs de production des biens de capital. Ces monopoles reposent sur une propriété de croissance des rendements d'échelle qui résulte à son tour à'externalités dynamiques à dimension intrasectorielle. Le modèle est caractérisé par un sentier de croissance à taux constants. Cette solution s'éloigne de celles récemment étudiées dans la littérature par l'obtention de taux de croissance différenciés pour le stock de capital et le montant de connaissances disponibles dans l'économie.

Keywords

O41O41
Type
Research Article
Information
Recherches Économiques de Louvain/ Louvain Economic Review , Volume 63 , Issue 2 , 1997 , pp. 123 - 132
Copyright
Copyright © Université catholique de Louvain, Institut de recherches économiques et sociales 1997 

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Footnotes

(*)

I thank A. d'Autume, B. Crettez, J. Glachant, P. Michel, F. Portier, F. Postel-Vinay, J.M. Tallon and B. Wigniolle for useful comments and suggestions. I am particularly grateful to the referees for detailed comments and numerous insights that have greatly improved the exposition. The responsability for any remaining mistakes or omissions is mine.

References

REFERENCES

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