The AK growth model is a standard endogenous model. This paper first solves the social planner's problem in this model and shows that the steady state is the only solution to this model. The paper then considers several generalizations of the AK model on the side of technology. Unlike the basic AK model, these extensions exhibit transitional dynamics. We derive steady-state equilibria of these AK-type models and shed light on some qualitative characteristics of the transitional dynamics depending on the parameters of the models. We show that there can be finite or asymptotic steady states. In the given extensions of the AK model, the growth rate of the economy is frequently observed to be faster in the beginning than in the asymptotic steady state (there is convergence). In order to show the possible importance of transitional dynamics in real economies, we examine a sample of 22 developed countries in the 1976-2010 period. We focus on the relative stability of the growth rates of real GDP between five-year subperiods and observe certain signs of instability. We also find a tendency for the real GDP growth rate to decline over time. This indicates a possibility that at least some developed countries were not in their steady states. This observation underscores the importance of theoretical extensions of the basic AK model.
