Nonlinear Dynamics in the Solow Model with Bounded Population Growth and Time-to-Build Technology

Abstract

The aim of this paper is to show that the Solow model equipped by realistic assumptions on technology and population dynamics is capable of explaining a well-known stylised fact of growth, that is, the presence of persistent oscillations of demoeconomic variables. In particular, our analysis shows that the coexistence of delays between (i) new investment and production and (ii) the birth date and the recruitment in the labour force is a source of cyclical behaviour in capital accumulation.