KALDORIAN DEMAND FUNCTIONS AND THE RETURN TO CAPITAL : AN ANALYSIS IN A TRADE THEORETIC FRAMEWORK

Research output: Journal Publications and Reviews (RGC: 21, 22, 62)21_Publication in refereed journalNot applicablepeer-review

1 Scopus Citations
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Author(s)

  • Manmohan Agarwal
  • Bharat R. Hazari

Related Research Unit(s)

Detail(s)

Original languageEnglish
Pages (from-to)113-118
Number of pages6
Journal / PublicationPacific Economic Review
Volume14
Issue number1
Publication statusPublished - Feb 2009

Conference

TitleConference on Institutions - Efficiency, Growth and Equity
PlaceIndia
CityNew Delhi
Period8 - 10 February 2007

Abstract

This paper shows that under certain plausible conditions capital accumulation raises the return to capital. A three good trade theoretic model with Kaldorian demand functions is used to establish this result. This proposition is also independent of the assumption of diminishing return to capital a key feature of endogenous growth theory. Our result sheds light on the high rates of investment and growth that many East Asian economies have achieved.