Growth and Inequality in an Experimental AK Model

In this paper we test the AK model of growth with laboratory experiments. In each period, agents produce and trade output in a market, and allocate it to consumption and investment. The economy should experience a constant and positive rate of growth. We analyze two treatments differing from technology. We find evidence of positive and constant growth, and the treatment with a better technology exhibits higher growth. Although subjects start the experiments with the same endowments, we find that this growth process is fueled by large inequalities.