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Erschienen in:
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2019 | OriginalPaper | Buchkapitel

5. A New Theory on Business Cycle and Economic Growth

verfasst von : Samuel Meng

Erschienen in: Patentism Replacing Capitalism

Verlag: Springer International Publishing

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Abstract

Starting from an investigation into the nature of business cycles, Chapter 4 illustrates a new theory to explain business cycle and economic growth. This theory is subsequently derived rigorously by using economic models. The implications of the new theory are also discussed. The chapter ends with a demonstration of empirical evidence relevant to the new theory.

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Vorheriges Kapitel A Critical Assessment of Different Schools of Economic Thought
Nächstes Kapitel A New Patent System to Usher in an Innovative Economy
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Fußnoten
1
It is arguable that consumption can include commodities purchased for future use or for others’ use (e.g. gift, donation or bequeathing). This type of consumption can be treated either as other people’s consumption if the commodity is used up, or as other people’s savings if the commodity is unused, which will be discussed next.
 
2
For simplicity, lending and borrowing are not considered in this paper. Lending and borrowing can delay the problems caused by consumption ceiling but cannot change the nature of the consumption ceiling because debts are required to be paid off eventually. Explicitly including lending and borrowing will not change the results, but will complicate the model.
 
3
For detail of Ramsey/Solow model, see Ramsey (1928), or more recent books on macroeconomics or mathematical economics such as Turkington (2007), Romer (2013).
 
4
A steady state can happen at any capital level, i.e. multiple steady states. In this case, we can obtain at each capital level a consumption level at which c′ = 0. The analysis for each steady state is similar. The assumption of an optimal steady state simplifies the analysis.
 
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Metadaten
Titel
A New Theory on Business Cycle and Economic Growth
verfasst von
Samuel Meng
Copyright-Jahr
2019
Buch
Patentism Replacing Capitalism

Print ISBN: 978-3-030-12246-1

Electronic ISBN: 978-3-030-12247-8

Copyright-Jahr: 2019

DOI
https://doi.org/10.1007/978-3-030-12247-8_5

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