EconPapers    
Economics at your fingertips  
 

Growth with a Fixed Factor

Erzo Luttmer

No 2012-1, Working Papers from University of Minnesota, Department of Economics

Abstract: Consider an economy in which a fi xed supply of unskilled labor can be combined with knowledge capital to produce consumption. The technology for accumulating knowledge capital is linear in knowledge capital. This leads to long-term growth if the production function for consumption goods is approximately Cobb-Douglas for large values of the stock of knowledge capital. The quality-ladder economy of Boldrin and Levine [2010] generates a menu of Leontief technologies with this feature. If the initial capital stock is low, there can be a long period of stagnation before unskilled wages start to grow, as in Lewis [1954]. A small open economy with a sufficiently low initial capital stock will run a trade surplus during its initial stages of development.

Keywords: economic growth; aggregate productivity (search for similar items in EconPapers)
JEL-codes: O4 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2012-01-01
New Economics Papers: this item is included in nep-dev, nep-dge and nep-fdg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5) Track citations by RSS feed

Downloads: (external link)
https://docs.google.com/a/umn.edu/viewer?a=v&pid=s ... OWM3MmYxMjk0YzI2MjA3 First version, 2012 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:min:wpaper:2012-1

Access Statistics for this paper

More papers in Working Papers from University of Minnesota, Department of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Caty Bach ().

 
Page updated 2023-11-11
Handle: RePEc:min:wpaper:2012-1