This paper exploits a natural experiment, the large destruction of capital in continental
Europe during World War II, to characterize the transitional dynamics of an economy that
begins with a capital stock below its steady state level. We use these regularities as a
benchmark to discriminate among competing growth specifications. A model that combines
non-separabilities in preferences with a technology that restricts the degree of substitutability
between inputs outperforms the widely used AK and Cobb–Douglas specifications with time …

This paper exploits a natural experiment, the large destruction of capital in continental
Europe during World War II, to characterize the transitional dynamics of an economy that
begins with a capital stock below its steady state level. We use these regularities as a
benchmark to discriminate among competing growth specifications. A model that combines
non-separabilities in preferences with a technology that restricts the degree of substitutability
between inputs outperforms the widely used AK and Ramsey-Cass-Koopmans …