NON-LINEAR REGRESSION WITH MINIMAL ASSUMPTIONS
Abstract
A simplified model that reflects Harrod's vi w of the world is presented. The natural (n) and warranted (k) rates of growth are defi d as follows: (1) full employment equilibrium can exist even if n and k are not equal; (2) if the natural rate of growth is lo er than the warranted r e of growth there will have to be a long t rm decline in the price of capital, a long term increase in the wage rate and a constant interest rate but lower than the rate of return on capital. When n is greater than the converse will have to happen; (3) the peculiarity of the equilibrium is that it places the system on a terminal path automatically For any initial conditions (satisfyi g the equilibrium conditio (11 t e system is placed on a terminal path whose level i obviously not unique; and (4) an increase of the savings ratio will incr se the rate of growth of output. Acceleration of the rate of growth of output by raising k may lead to a negative interest-rate which may cause a const nt inflation in an expanded model which contains a financial structure.
Document Details
- Document Type
- Technical Report
- Publication Date
- Nov 30, 1961
- Accession Number
- AD0268917
Entities
People
- Harvey M. Wagner
Organizations
- Stanford University