Balanced Growth Despite Uzawa

Gene Grossman, Elhanan Helpman, Ezra Oberfield and Thomas Sampson

No 21861, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: The evidence for the United States points to balanced growth despite falling investment-good prices and an elasticity of substitution between capital and labor less than one. This is inconsistent with the Uzawa Growth Theorem. We extend Uzawa's theorem to show that the introduction of human capital accumulation in the standard way does not resolve the puzzle. However, balanced growth is possible if schooling is endogenous and capital is more complementary with schooling than with raw labor. We describe balanced growth paths for a variety of neoclassical growth models with capital-augmenting technological progress and endogenous schooling. The balanced growth path in an overlapping-generations model in which individuals choose the duration of their education matches key features of the U.S. economic record.

JEL-codes: E25 J24 O40 (search for similar items in EconPapers)
Date: 2016-01
New Economics Papers: this item is included in nep-fdg and nep-ino
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Citations: View citations in EconPapers (17)

Published as Gene M. Grossman & Elhanan Helpman & Ezra Oberfield & Thomas Sampson, 2017. "Balanced Growth Despite Uzawa," American Economic Review, American Economic Association, vol. 107(4), pages 1293-1312, April.

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Related works:
Journal Article: Balanced Growth Despite Uzawa (2017)
Working Paper: Balanced growth despite Uzawa (2017)
Working Paper: Balanced growth despite Uzawa (2016)
Working Paper: Balanced Growth Despite Uzawa (2016)
Working Paper: Balanced Growth Despite Uzawa (2016)
Working Paper: Balanced growth despite Uzawa (2016)
Working Paper: Balanced Growth Despite Uzawa (2016)
Working Paper: Balanced Growth Despite Uzawa (2016)
Working Paper: Balanced Growth Despite Uzawa
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