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The Golden Rule was, according to Allais, [8] first stated by Jacques Desrousseaux in 1959 in an unpublished paper, see also Desrousseaux. [9] The rule was also independently discovered by Edmund Phelps, [ 10 ] Carl-Christian von Weizsäcker, [ 11 ] and Trevor Swan [ 12 ] in the neoclassical setting.
The Golden Rule is a guideline for the operation of fiscal policy. The Golden Rule states that over the economic cycle, the Government will borrow only to invest and not to fund current spending. In layman's terms this means that on average over the ups and downs of an economic cycle the government should only borrow to pay for investment that ...
At the Cowles Foundation, his research focused mainly on neoclassical growth theory, following the seminal work of Robert Solow. [citation needed] As part of his research, in 1961 Phelps published a famous paper [2] [3] on the Golden Rule savings rate, one of his major contributions to economic science
"Golden Rule Sign" that hung above the door of the employees' entrance to the Acme Sucker Rod Factory in Toledo, Ohio, 1913. The Golden Rule is the principle of treating others as one would want to be treated by them. It is sometimes called an ethics of reciprocity, meaning that you should reciprocate to others how you would like them to treat ...
Solow took an interest in economics during his early time at Harvard, but World War II called the Brooklyn native into three years of duty in North Africa and Europe.
An economy in the Solow growth model is dynamically inefficient if the savings rate exceeds the Golden Rule savings rate.If the savings rate is greater than the Golden Rule savings rate, a decrease in savings rate will increase consumption per effective unit of labor.
Robert Merton Solow, GCIH (/ ˈ s oʊ l oʊ /; August 23, 1924 – December 21, 2023) was an American economist and Nobel laureate whose work on the theory of economic growth culminated in the exogenous growth model named after him.
In the Solow-Swan model, economic growth is driven by the accumulation of physical capital until this optimum level of capital per worker, which is the "steady state" is reached, where output, consumption and capital are constant. The model predicts more rapid growth when the level of physical capital per capita is low, something often referred ...