Balanced Growth Despite Uzawa
Grossman, Gene M.
MetadataShow full item record
CitationGrossman, Gene M., Elhanan Helpman, Ezra Oberfield, and Thomas Sampson. 2017. “Balanced Growth Despite Uzawa.” American Economic Review107 (4): 1293–1312. https://doi.org/10.1257/aer.20151739.
AbstractThe evidence for the United States points to balanced growth despite falling investment-good prices and a 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 the introduction of 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 present a class of aggregate production functions for which a neoclassical growth model with capital-augmenting technological progress and endogenous schooling converges to a balanced growth path.
Citable link to this pagehttp://nrs.harvard.edu/urn-3:HUL.InstRepos:41534595
- FAS Scholarly Articles