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Balanced Growth Despite Uzawa

Gene M. Grossman, Elhanan Helpman, Ezra Oberfield () and Thomas Sampson

American Economic Review, 2017, vol. 107, issue 4, 1293-1312

Abstract: The 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.

JEL-codes: E22 E24 I26 J24 O33 O41 O47 (search for similar items in EconPapers)
Date: 2017
Note: DOI: 10.1257/aer.20151739
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Working Paper: Balanced Growth Despite Uzawa (2016) Downloads
Working Paper: Balanced growth despite Uzawa (2016) Downloads
Working Paper: Balanced Growth Despite Uzawa (2016) Downloads
Working Paper: Balanced Growth Despite Uzawa (2016) Downloads
Working Paper: Balanced Growth Despite Uzawa (2016)
Working Paper: Balanced Growth Despite Uzawa Downloads
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