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Title:A note on balanced growth with a less than unitary elasticity of substitution PDF Logo
Authors:León-Ledesma, Miguel A.
Satchi, Mathan
Issue Date:2010
Series/Report no.:School of Economics discussion papers 10,07
Abstract:We present a simple production technology in which the choice of production technique results in a balanced growth path even in the presence of capital-augmenting technical progress. Given a particular choice of technique, the production function is CES with a less than unitary elasticity of factor substitution. The form of this production technology is also invariant to the choice of units, allowing us to abstract from the normalization considerations that often accompany the use of CES. The approach yields a balanced growth path but short-run time-varying factor shares without requiring an explicit model of the R&D sector.
Subjects:balanced growth
capital-augmenting technical progress
measurement units
elasticity of substitution
JEL:E25
O33
O40
Document Type:Working Paper
Appears in Collections:School of Economics Discussion Papers, University of Kent

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