A Generalized Uzawa Growth Theorem

Gregory Casey and Ryo Horii

ISER Discussion Paper from Institute of Social and Economic Research, The University of Osaka

Abstract: We prove a generalized, multi-factor version of the Uzawa steady-state growth theorem. Balanced growth with capital-augmenting technical change is possible when capital has a unitary elasticity of substitution with at least one other factor of production. Thus, a neoclassical growth model with three or more factors of production can be consistent with empirical evidence on both the capital-labor elasticity of substitution and the declining price of investment relative to consumption. In a three-factor model calibrated to US data, medium-run fluctuations in the investment price explain labor share movements from 1960-2000, but not the subsequent fall in the labor share.

Date: 2023-10
New Economics Papers: this item is included in nep-gro
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Journal Article: A Generalized Uzawa Growth Theorem (2024)
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Persistent link: https://EconPapers.repec.org/RePEc:dpr:wpaper:1215

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