### Abstract

Original language | English |
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Place of Publication | København |

Number of pages | 10 |

Publication status | Published - 2005 |

### Cite this

*A Three-period Samuelson-Diamond Growth Model*. København.

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**A Three-period Samuelson-Diamond Growth Model.** / Blomgren-Hansen, Niels.

Research output: Working paper › Research

TY - UNPB

T1 - A Three-period Samuelson-Diamond Growth Model

AU - Blomgren-Hansen, Niels

PY - 2005

Y1 - 2005

N2 - Samuelson (1958) analyses a three-period model, whereas Diamod (1965) considers a two-period model. This difference poses the question whether the insights derived by analysing the simple two-period model carry over in the more complicated three-period case. They do. The Samuelson model (no productive capital) has only one positive solution (r = n); however, this root is unstable. The Diamond model (no nonproductive abode of purchasing power) has also only one positive solution; the root is stable but inefficient. In a model with both productive capital and a non-productive abode of purchasing power, the inefficient Diamond solution becomes unstable and the socially optimal solution becomes stable.

AB - Samuelson (1958) analyses a three-period model, whereas Diamod (1965) considers a two-period model. This difference poses the question whether the insights derived by analysing the simple two-period model carry over in the more complicated three-period case. They do. The Samuelson model (no productive capital) has only one positive solution (r = n); however, this root is unstable. The Diamond model (no nonproductive abode of purchasing power) has also only one positive solution; the root is stable but inefficient. In a model with both productive capital and a non-productive abode of purchasing power, the inefficient Diamond solution becomes unstable and the socially optimal solution becomes stable.

KW - Vækstteori

M3 - Working paper

BT - A Three-period Samuelson-Diamond Growth Model

CY - København

ER -