Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/19135 
Year of Publication: 
2006
Series/Report no.: 
CESifo Working Paper No. 1671
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
A common perception about the neoclassical growth model is that an economy devoid of capital cannot evolve to strictly positive levels of output if capital is essential. We challenge this view by positing a broad class of production functions, encompassing the neoclassical production function, that'surprisingly'show that a take-off is possible even though the initial capital stock is zero and capital is essential. Since the marginal product of capital is initially infinite, the ?trivial? steady state becomes so unstable that the solution to the equation of motion involves the possibility of a take-off. When it happens, the take-off is spontaneous: there is no causality, not even randomness.
Subjects: 
capital accumulation
neoclassical growth model
JEL: 
O11
N6
O41
O14
Document Type: 
Working Paper
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