A GENERALIZED STEADY-STATE GROWTH THEOREM

Andreas Irmen

Macroeconomic Dynamics, 2018, vol. 22, issue 4, 779-804

Abstract: Is there an economic justification for why technical change is by assumption labor-augmenting in dynamic macroeconomics? The literature on the endogenous choice of capital- and labor-augmenting technical change finds that technical change is purely labor-augmenting in steady state. The present paper shows that this finding is mainly an artifact of the underlying mathematical models. To make this point, Uzawa's steady-state growth theorem is generalized to a neoclassical economy that, besides consumption and capital accumulation, uses current output to create technical progress or to manufacture intermediates. The generalized steady-state growth theorem is shown to encompass four models of endogenous capital- and labor-augmenting technical change and the typical model of the induced innovations literature of the 1960s.

Date: 2018
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Related works:
Working Paper: A Generalized Steady-State Growth Theorem (2015)
Working Paper: A Generalized Steady-State Growth Theorem (2013)
Working Paper: A Generalized Steady-State Growth Theorem (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:cup:macdyn:v:22:y:2018:i:04:p:779-804_00

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