A Note on the Imbalance Effect in the Uzawa-Lucas Model

Petr Duczynski ()
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Petr Duczynski: Univerzity of Hradec Kralove

Economics Bulletin, 2007, vol. 4, issue 38, 1-12

Abstract: The Uzawa-Lucas model is believed to yield a positive dependence of the output growth on the ratio of human capital to physical capital (an empirically plausible imbalance effect). We show that the imbalance effect become less plausible for a low physical capital share and a low elasticity of intertemporal substitution. In particular, the model is inconsistent with empirical observations for a relatively broad range of realistic parameter specifications.

JEL-codes: D9 O4 (search for similar items in EconPapers)
Date: 2007-10-09
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