Balanced growth and degrowth with human capital

Stefano Bosi, Carmen Camacho and Thai Ha-Huy

Economics Letters, 2023, vol. 232, issue C

Abstract: In a simple discrete-time version of Lucas (1988) we find that the Balanced Growth Path (BGP) is always the unique optimal planner’s solution: with linear or strictly concave production functions, with unbounded utility functions, with or without human capital depreciation. When the ”speed” of human capital accumulation is high, the optimal working time is constant and below its upper bound. Capital grows at a constant factor, but degrowth is also possible when this factor is less one (under positive capital depreciation). When this speed is low, optimal working time is at its boundary and capital declines at its depreciation factor (degrowth).

Keywords: Human capital; Balanced growth path (search for similar items in EconPapers)
JEL-codes: C61 D50 O40 (search for similar items in EconPapers)
Date: 2023
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Working Paper: Balanced growth and degrowth with human capital (2023)
Working Paper: Balanced growth and degrowth with human capital (2023)
Working Paper: Balanced growth and degrowth with human capital (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:232:y:2023:i:c:s0165176523003737

DOI: 10.1016/j.econlet.2023.111348

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