A Generalized Steady-State Growth Theorem

Irmen, Andreas

A Generalized Steady-State Growth Theorem

No 4477, CESifo Working Paper Series from CESifo

Abstract: Uzawa’s steady-state growth theorem (Uzawa (1961)) is generalized to a neoclassical economy that uses current output, e. g., to create technical progress or to manufacture intermediates. The difference between aggregate final-good production and these resources is referred to as net output. The new generalized steady-state growth theorem holds since net output exhibits constant returns to scale in capital and labor. This insight provides an understanding for why technical change is labor-augmenting in steady state even if capital-augmenting technical change is feasible. By example, this point is made for three recent growth models that allow for endogenous capital- and labor-augmenting technical change, namely, Irmen (2013), Acemoglu (2003), and Acemoglu (2009), Chapter 15. The reduced form of these models is shown to be consistent with the generalized steady-state growth theorem.

Keywords: steady-state growth; capital accumulation; Uzawa's Theorem; endogenous direction of technical change (search for similar items in EconPapers)
JEL-codes: E10 O10 O40 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Journal Article: A GENERALIZED STEADY-STATE GROWTH THEOREM (2018)
Working Paper: A Generalized Steady-State Growth Theorem (2015)
Working Paper: A Generalized Steady-State Growth Theorem (2013)
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