Balanced growth and degrowth with human capital

Stefano Bosi (), Carmen Camacho () and Thai Ha-Huy
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Stefano Bosi: Université Paris-Saclay, EPEE - Centre d'Etudes des Politiques Economiques - UEVE - Université d'Évry-Val-d'Essonne - Université Paris-Saclay, UEVE - Université d'Évry-Val-d'Essonne
Carmen Camacho: PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement

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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)
Date: 2023-11
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Published in Economics Letters, 2023, 232, ⟨10.1016/j.econlet.2023.111348⟩

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Journal Article: 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:hal:journl:halshs-04353236

DOI: 10.1016/j.econlet.2023.111348

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