The Solow's Model with Endogenous Population: A Neoclassical Growth Cycle Model

Abstract

It is shown here that the Solow (1956) neo-classical growth paradigm not only explains the “first ” stylised fact of economic growth, namely the existence of a globally stable state of balanced growth, but, once endowed with a demographically founded formulation of the labour supply, is also capable to endogenously explain a second main stylised fact of growth, i.e., the generation of globally stable oscillations around the path of balanced growth.