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Abstract or Description

Have new technologies fundamentally changed the way we look at economic growth? The neoclassical growth model, one of the most prominent growth theories of the past, states that the economy eventually reaches a steady state where per capita output remains constant. However, some economists are now starting to disagree with this claim and instead believe that a new economy is emerging in which computing power and other technologies enable the economy to grow indefinitely. One recent theory of economic growth, the AK growth model, explains how this 'new economy' functions. This project shows why the AK growth model is a more accurate representation of the economy than the neoclassical growth model and then uses a computer simulation to illustrate the differences between the two theories.


Advisor: Stanley E. Zin

Department of Economics.