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Capital accumulation is the dynamic that motivates the pursuit of profit, involving the investment of money or any financial asset with the goal of increasing the initial monetary value of said asset as a financial return whether in the form of profit, rent, interest, royalties or capital gains.
According to Kaldor, “The purpose of a theory of economic growth is to show the nature of non-economic variables which ultimately determine the rate at which the general level of production of the economy is growing, and thereby contribute to an understanding of the question of why some societies grow so much faster than others.” [2] [1]
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 ...
McKenzie in 1976 published a review of the idea up to that point. He saw three general variations of turnpike theories. [8]In a system with a set initial and terminal capital stock where the objective of the economic planner is to maximize the sum of utilities over the finite accumulation period, then so long as the accumulation period is long enough, most of the optimal path will be within ...
Its implications were that growth depends on the quantity of labour and capital; more investment leads to capital accumulation, which generates economic growth. The model carries implications for less economically developed countries, where labour is in plentiful supply in these countries but physical capital is not, slowing down economic progress.
Capital as Power documents, among other things, the neoclassical economics project as a theoretical enterprise aiming to separate economics from politics. In earlier work dating from 2000, the authors had, under the heading of capital accumulation, traced that separation to the rise of industrial capitalism in the later 18th century. [4]
Spear and Young re-examine the history of optimal growth during the 1950s and 1960s, [8] focusing in part on the veracity of the claimed simultaneous and independent development of Cass' "Optimum growth in an aggregative model of capital accumulation" (published in 1965 in the Review of Economic Studies), and Tjalling Koopman's "On the concept ...
It attempts to explain long-run economic growth by looking at capital accumulation, labor or population growth, and increases in productivity largely driven by technological progress. At its core, it is an aggregate production function , often specified to be of Cobb–Douglas type, which enables the model "to make contact with microeconomics ".