What to explore
Change parameters and watch the model adjust.
- Productivity, saving rate, depreciation, and policy wedges on net returns
- Initial capital and horizon for time-path comparisons
Advanced macroeconomics
AK Endogenous Growth Model
An endogenous-growth model with constant returns to accumulable capital, allowing policy and saving behavior to affect long-run growth directly.
Focus
Persistent growth, policy wedges, and accumulation
Change technology, saving, and policy wedges to see how the growth rate of capital, output, and consumption can remain permanently elevated.Core ideas
Interpret the mechanics before you chase the graphs.
- With an AK production structure, accumulation can sustain ongoing growth rather than only level effects.
- Policy changes affect the long-run growth rate when they change the net return to accumulable capital.
- The model is useful as a contrast case to the convergence logic of Solow.
Learning goals
What this model should help students internalize.
- See why constant returns to broad capital eliminate Solow-style convergence in growth rates.
- Interpret how policy wedges or productivity shifts map into permanent growth changes.
- Compare endogenous-growth dynamics with diminishing-returns growth models.
Prerequisites
Concepts to review before diving in.
- Solow and Ramsey growth intuition
- Basic comfort with balanced-growth reasoning
Next models to study
Keep moving through the track.
Advanced macroeconomics
Small Open Economy Model
Explore how productivity shifts, world interest rates, and impatience shape consumption, external borrowing, and the current account over time.
Upper-undergraduate econometrics
Simple OLS Regression
Adjust the data-generating process and watch the fitted line, coefficient estimates, and residual behavior move with noise, slope, and sample size.