Author(s)

Ryoji Hiraguchi

Faculty of Economics, Ritsumeikan University, Kyoto, Japan.

We study the AK growth model with external habit formation. We show that there exists a unique solution path expressed in terms of the Gauss hypergeometric function. Using the closed-form solution, we also show that the optimal path converges to a balanced growth path.

Endogenous Growth; Closed-Form Solution; Habit Formation

Hiraguchi, R. (2012) On the Closed-Form Solution to the Endogenous Growth Model with Habit Formation. Theoretical Economics Letters, 2, 351-354. doi: 10.4236/tel.2012.24064.