Adjustment time and economic growth revisited

Since the theory of the adjustment time in a neoclassical growth model was first published close to two decades ago Sato Sato, February 1963, Sato, June 1964], there have appeared a number of interesting articles dealing with different aspects of adjustment time and economic growth. The purpose of this note is to verify the original conclusions in the framework of variable elasticity of substitutions (VES) production functions. All of the other assumptions are preserved. The results indicate that the original assertion concerning the length of time needed for 90 percent of the adjustment applies to a non-Cobb-Douglas production function as well. “Vicinity” (90%) of the new equilibrium can be reached only after a sufficiently long period of time—approximately 100 years on the average. Furthermore, the pattern of adjustment for this model is very similar to that of the original model.