A Generalized Steady-State Growth Theorem

Arbeitspapier

Uzawa's steady-state growth theorem (Uzawa (1961)) is generalized to a neoclassical economy that uses current output, e. g., to create technical progress or to manufacture intermediates. The difference between aggregate final-good production and these resources is referred to as net output. The new generalized steady-state growth theorem holds since net output exhibits constant returns to scale in capital and labor. This insight provides an understanding for why technical change is labor-augmenting in steady state even if capital-augmenting technical change is feasible. By example, this point is made for three recent growth models that allow for endogenous capital- and labor-augmenting technical change, namely, Irmen (2013), Acemoglu (2003), and Acemoglu (2009), Chapter 15. The reduced form of these models is shown to be consistent with the generalized steady-state growth theorem.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 4477

Classification and Topics

• Classification: Wirtschaft ; General Aggregative Models: General ; Economic Development: General ; Economic Growth and Aggregate Productivity: General
• Subject: steady-state growth ; capital accumulation ; Uzawa's Theorem ; endogenous direction of technical change

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Irmen, Andreas
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2013

Further information

• Handle: http://hdl.handle.net/10419/89746
• Last update: 10.03.2025, 11:42 AM CET