Steady-State Growth and the Elasticity of Substitution

Arbeitspapier

In a neoclassical economy with endogenous capital- and labor-augmenting technical change the steady-state growth rate of output per worker is shown to increase in the elasticity of substitution between capital and labor. This confirms the assessment of Klump and de La Grandville (2000) that the elasticity of substitution is a powerful engine of economic growth. However, unlike their findings my result applies to the steady-state growth rate. Moreover, it does not hinge on particular assumptions on how aggregate savings come about. It holds for any household sector allowing savings to grow at the same rate as aggregate output.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Discussion Paper Series ; No. 496

Classification and Topics

• Classification: Wirtschaft
• Subject: Capital Accumulation ; Elasticity of Substitution ; Direction of Technical Change ; Neoclassical Growth Model ; Neoklassisches Wachstumsmodell ; Wachstumstheorie ; Faktorsubstitution ; Substitutionselastizität ; Investition ; Technischer Fortschritt ; Theorie

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Irmen, Andreas
• Event: Veröffentlichung
• (who): University of Heidelberg, Department of Economics
• (where): Heidelberg
• (when): 2010

Further information

• DOI: doi:10.11588/heidok.00010438
• Handle: http://hdl.handle.net/10419/127312
• URN: urn:nbn:de:bsz:16-opus-104381
• Last update: 10.03.2025, 11:44 AM CET