accumulate

Note that although there are external increasing returns to scale at the aggregate level, the production function is characterized by decreasing returns in the accumulable factors, and there is no long-run growth in the economy.

This conclusion is based on evidence that relies exclusively on models without an accumulable factor of production.

We allow for the possibility that there is a positive productivity gap between the majority and the minority on the grounds that there exist accumulable factors, such as social capital and connections, that influence labor productivity.

Put another way, an open economy may behave very much as predicted by the AK models--models that exhibit constant returns to accumulable factors--developed by growth theorists a decade or so ago.

The evolution of the accumulable inputs is given by