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http://hdl.handle.net/1893/20986| Appears in Collections: | Economics Working Papers |
| Peer Review Status: | Refereed |
| Title: | The Emperor Has New Clothes: Empirical Tests of Mainstream Theories of Economic Growth |
| Author(s): | Greasley, David Hanley, Nicholas McLaughlin, Eoin Oxley, Les |
| 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 US comprehensive wealth |
| JEL Code(s): | E21 E22 C61 |
| Issue Date: | Aug-2014 |
| 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 |
| URI: | http://hdl.handle.net/1893/20986 |
| Affiliation: | University of Edinburgh Economics University of St Andrews University of Waikato |
Files in This Item:
| File | Description | Size | Format | |
|---|---|---|---|---|
| SEDP-2014-08-Greasley-Hanley-McLaughlin-Oxley.pdf | 811.34 kB | Adobe PDF | View/Open |
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