Consult about neoclassical growth theory and perfectly competitive markets.

The core of neoclassical individuals thinks that exogenous economic variables and decreasing marginal costs and constant returns to scale are the same. Just pay attention to the assumptions. The essence of the Solow model or the steady-state growth is the same, and both have reached the conclusion of absolute convergence.

The relative convergence is what the endogenous is talking about, but some models with different assumptions, and the landlord just memorizes several macroscopic models. Free competition does not maximize social welfare. On a micro level, let's talk about the points mentioned in externality and general equilibrium.

From a macro perspective, it is the external variable that free competition can produce. The first principles of welfare economics only say that the economy is efficient when the equilibrium produced by free competition is generated, but it does not say that it is welfare maximization. Welfare involves fairness and efficiency, although the second principle is explained, but the premise is that the indifference curve is convex, so it cannot be said that the maximum social welfare, but only shows the correctness of the two principles of welfare economics under the premise of free competition and consumer assumption.

Personal opinion, there may be mistakes.

In fact, the two are essentially perfectly competitive markets that have achieved the optimal allocation of resources, and the output is the highest, in this state, the society produces at the lowest cost, consumers get the greatest satisfaction from consumer products, manufacturers get the maximum profits, and the factors of production are paid according to their respective contributions in production. According to the Pareto optimal criterion, this state is socially optimal.

In addition, in terms of total social welfare, the total welfare of perfect competition is the largest.

Economic growth is the process of increasing the material wealth of society, and it is the common essence of the dynamic process of general social reproduction. It represents an increase in a country's potential GDP or output. For a country, economic growth is an important indicator of a country's economic condition in the macroeconomy.

The neoclassical theory of economic growth introduces exogenous technological progress and population growth rates to account for sustained economic growth.

The basic implication of Solow's growth model is that the rate of change in capital ownership per capita k* depends on the difference between the per capita savings rate sf(k) and the amount of capital required to allocate nk per newly growing population according to the given capital-labor ratio.

Solow's growth model sf(k)=k*+nk also suggests another meaning. The per capita savings rate sf(k) in a society serves two purposes:

The second is to provide an average amount of capital equipment for each new population, which is called "the generalization of capital". In other words, when all the savings in the economy are converted into investments, part of it is used to increase the amount of capital owned per capita (capital deepening), and the other part is used to equip the new population with an average amount of capital (capital broadening).

As shown in the figure, the horizontal axis is capital ownership per capita k, and the vertical axis is per capita income f(k). The intensive production function curve f(k) shows that as per capita capital ownership increases, the per capita output, i.e., per capita income f(k), increases accordingly. The per capita savings curve sf(k) is below the per capita income curve f(k) because savings are only a part of income.

When the per capita capital ownership k of Qijian is OB, then the per capita income at this time is BJ, and the per capita savings are BP, and part of this per capita savings is used to equip the BG of capital broadening for each new population, and part of the GB, which is used for capital deepening, that is, the per capita capital ownership, that is, the GP of capital deepening. This means that k will increase, which will lead to an increase in f(k).

Therefore, point B will move right to point A. The deepening of capital at point A is equal to 0, and all per capita savings are used for the broadening of capital, and the economy reaches equilibrium. Vice versa.

1 Main conclusions.

1) Regardless of the point of view, the economy converges towards the equilibrium growth path, where the growth rate of each variable is constant.

2) Under the condition that other exogenous variables are similar, economies with low per capita capital have faster increases in per capita capital, and economies with low per capita income have higher growth rates.

3) The growth of per capita output (y l)** is due to the per capita capital stock and technological progress, but only technological progress can lead to a permanent increase in per capita output.

4) By adjusting the savings rate, the "first-law" growth of optimal per capita consumption and optimal capital stock can be realized.

5) changes in the savings rate only affect the growth rate temporarily, not permanently; Significant changes in the savings rate have only a small and slow effect on changes in output on the balanced growth path.

2 Criticism. 1) Failure to explain the true nature of long-term economic growth. Technological progress (the effectiveness of labor) is seen as exogenous, and this is precisely the key to long-term economic growth. Thus, the Solo model explains growth by "assumed growth".

2) Theoretical ** does not match the actual data. If the market returns of capital are roughly a reflection of its contribution to output, then changes in physical capital accumulation do not account for either world economic growth or income disparities between countries.

For example, according to the c-d production function, y = f(k) = k, and the general a=1 3, let the poor country variable band *, if y y*=10, then k k* = 101 a = 1000. (Such a large difference in capital stock!) ）

Marginal product of capital m'p'k = ''f(k) = ''a'k''a − 1 = ''a'y'', if y y*=10, then m'p'k / ''m'p*'k = 1 / 100。(Such a high rate of return on capital difference!) ）

According to the neoclassical growth model, the factors that enable a country's economy to grow sustainably are the amount of investment, the amount of labor, and the productivity.

The amount of investment is the accumulation of the economy, that is, the goods and services produced by a country in a year are not consumed, but are used to invest so that more goods can be produced in the future. And because in the calculation of GDP, investment (i) = savings (s), it is sometimes called the savings rate.

The amount of labor refers to the time and energy invested in production by workers in a country.

Productivity refers to the efficiency of the use of resources (including human, material, and financial resources), generally speaking, with the improvement of technology, more output can be obtained by investing the same resources, that is, higher production efficiency. FYI.

The research of the new growth theory mainly revolves around the endogenization of technological change, which is in line with the traditional neoclassical growth theory.

Answer: Technological progress is significantly different as exogenous variables.

The New Growth Theory constructs a theoretical framework.

It is believed that it governs the production process.

The system plays a more important role in sustained economic growth than the external force system, and tries to solve it from the internal factors of the economic system.

Explain technological progress, and put forward the idea of endogenous technological progress in combination with the reality of the current economic development of countries in the world.

The neoclassical growth model studies the growth of the economy from the point of view of capital accumulation.

I'm going to theorize it in simple words, and I'm not going to list the formulas.

The main factor for capital increase is savings, which are converted into investments. The amount is s*y

The main factors for capital reduction are: depreciation, population increase (which will reduce capital per capita).

The economy will eventually tend to a steady state, that is, the amount of savings = depreciation + the amount of incremental population crowding.

The equilibrium is derived from the conditions: marginal output of capital = depreciation rate + population growth rate.

If you understand the above part, let's add the factors of technological progress.

Harold is neutral, technological progress is mainly reflected in the quality of labor, production functional labor additive type, y=f(k,al).

The assumption that the scale remuneration remains unchanged, the original worker becomes the current al-efficiency worker, and do it again according to the above steps.

The equilibrium condition for steady state is obtained: marginal output of capital = depreciation rate + population growth rate n + technological progress rate g

For the calculation of these two cases, you refer to any textbook on advanced macroeconomics.

Let me focus on explaining to you the significance of scientific and technological progress.

Although the economy has also moved to a steady state, the capital and output of each efficient worker have remained unchanged, but the per capita output and total output have increased at the rate of g and n+g, respectively.

In this way, the model is able to explain what we are seeing (that the economy is not stagnating, that our living standards and well-being have been growing), and that the Solow model shows that technological progress is the source of long-term economic growth.

I'm brief, there are inaccuracies, because there is something to go out and discuss it next time.

At this stage, most of the economic growth is created by technology, in the era of rapid development of technology, it is difficult for people's simple human activities to achieve the expected goals, so it is inseparable from technological productivity, of course, there are also human intelligence factors But only technology can be one of the people to be expressed, so technological progress is an important factor in economic growth.

1.The model assumes that all savings are converted into investments, i.e., the savings-to-investment conversion ratio is assumed to be 1;

2.The model assumes that the marginal rate of return on an investment is diminishing, i.e., the return on scale of an investment is constant;

3.The model modifies the production technology assumptions of the Harold-Thomas model and adopts the neoclassical Cobb-Douglas production function where capital and labor are substituted, thus solving the problem that the economic growth rate and the population growth rate in the Harold-Thomas model cannot be spontaneously equal.

Because in the Cobb-Douglas production function, the quantity of labor is given, and as the capital stock increases, the law of diminishing marginal returns on capital ensures that economic growth stabilizes at a certain value. The model has no expectation of investment, so it avoids the instability between the economic growth rate of *** and the real economic growth rate, and concludes that the economy is growing steadily.