• Corpus ID: 18235132

Two Perspectives on Growth and Taxes

  title={Two Perspectives on Growth and Taxes},
  author={Peter N. Ireland},
  journal={Economic Growth eJournal},
  • P. Ireland
  • Published 1994
  • Economics
  • Economic Growth eJournal
Robert Solow’s (1956) neoclassical model reigns as the standard theory of economic growth. The Solow model begins with the assumption that capital accumulation is subject to diminishing marginal returns. It attributes sustained growth in national income per capita to technological progress that proceeds at a constant, exogenously given rate. Thus, it is an exogenous growth model . Recently, economists have developed alternatives to the Solow model that build on Frank Knight’s (1944) earlier… 

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