|Appears in Collections:||Economics Working Papers|
|Peer Review Status:||Refereed|
|Title:||The Emperor Has New Clothes: Empirical Tests of Mainstream Theories of Economic Growth|
|Citation:||Greasley D, Hanley N, McLaughlin E & Oxley L (2014) The Emperor Has New Clothes: Empirical Tests of Mainstream Theories of Economic Growth. Stirling Economics Discussion Paper, 2014-08.|
|Keywords:||inter-temporal utility maximisation|
modern growth theory
|Series/Report no.:||Stirling Economics Discussion Paper, 2014-08|
|Abstract:||Modern macroeconomic theory utilises optimal control techniques to model the maximisation of individual well-being using a lifetime utility function. Agents face choices over current and future consumption (with resultant implied savings decisions) seeking to maximise the present value of current plus future well-being. However, such inter-temporal welfare-maximising assumptions remain empirically untested. In the work presented here we test whether welfare was in (historical) fact maximised in the US between 1870-2000 and find empirical support for the optimising basis of growth theory, but only once a comprehensive view of what constitutes a country's wealth or capital is taken into account.|
|Type:||Working or Discussion Paper|
|Affiliation:||University of Edinburgh|
University of St Andrews
University of Waikato
|SEDP-2014-08-Greasley-Hanley-McLaughlin-Oxley.pdf||811.34 kB||Adobe PDF||View/Open|
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