Arbeitspapier

Balanced Growth Despite Uzawa

Evidence for the United States suggests balanced growth despite falling investment-good prices and less than unitary elasticity of substitution between capital and labor. This is inconsistent with the Uzawa Growth Theorem. We extend Uzawa.s theorem to show that introducing human capital accumulation in the standard way does not resolve the puzzle. However, balanced growth is possible if education is endogenous and capital is more complementary with schooling than with raw labor. We describe balanced growth paths for several neoclassical growth models with capital-augmenting technological progress and endogenous schooling. The balanced growth path in an overlapping-generations model in which individuals choose their time in school matches key features of the U.S. record.

Language
Englisch

Bibliographic citation
Series: CESifo Working Paper ; No. 5774

Classification
Wirtschaft
One, Two, and Multisector Growth Models
Subject
neoclassical growth
balanced growth
technological progress
capital-skill complementarity

Event
Geistige Schöpfung
(who)
Grossman, Gene
Helpman, Elhanan
Oberfield, Ezra
Sampson, Thomas
Event
Veröffentlichung
(who)
Center for Economic Studies and ifo Institute (CESifo)
(where)
Munich
(when)
2016

Handle
Last update
20.09.2024, 8:24 AM CEST

Data provider

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Object type

  • Arbeitspapier

Associated

  • Grossman, Gene
  • Helpman, Elhanan
  • Oberfield, Ezra
  • Sampson, Thomas
  • Center for Economic Studies and ifo Institute (CESifo)

Time of origin

  • 2016

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