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| Title: | | A note on balanced growth with a less than unitary elasticity of substitution  |
| 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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