Factor substitution and convergence speed in the neoclassical model with elastic labor supply

Manuel Gómez

Economics Letters, 2018, vol. 172, issue C, 89-92

Abstract: We study the link between factor substitutability and the speed of convergence in the Ramsey–Cass–Koopmans model with elastic labor supply and normalized CES production. If the baseline value of capital per unit of effective labor is below its steady-state value, an increase in the elasticity of substitution reduces the convergence speed.

Keywords: Elasticity of substitution; Elastic labor supply; Convergence speed (search for similar items in EconPapers)
JEL-codes: E21 O41 (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:172:y:2018:i:c:p:89-92

DOI: 10.1016/j.econlet.2018.08.040

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