TITLE:
A Kind of Neither Keynesian Nor Neoclassical Model (6): The Ending State of Economic Growth
AUTHORS:
Ming’an Zhan, Zhan Zhan
KEYWORDS:
Cobb-Douglas Function, Dynamic Optimization, Exogenous Growth, Endogenous Growth
JOURNAL NAME:
Open Access Library Journal,
Vol.4 No.5,
May
18,
2017
ABSTRACT: In traditional
macroeconomics argues that the
decision and fluctuation of output level is short-term theory, and the growth of output is a
long-term theory. The former is determined by the demand; the latter is
determined by the production. No one
has questioned why the former is determined by production and the latter is
determined by demand. This
paper argues that the factors that affect the output are the same in the short
and long term, but there is no need to analyze the problem of fluctuation in
the long term. Based on the analysis of
the growth path in our previous paper, this paper first examines whether our
model is applicable to the Pontryagin maximum principle, and then analyzes the
difference of the Cobb-Douglas function in the exogenous growth model and the
endogenous growth model. Reveal the special role of parameter A in Cobb-Douglas function: as long as A is considered as output-related
variables, there is no substantial difference between the so-called exogenous
model and endogenous mode. Finally, according to the trend of the growth path and the nature
of A, the paper derives the final
state of Cobb-Douglas function.