Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/230458
Authors: 
Casey, Gregory
Horii, Ryo
Year of Publication: 
2019
Series/Report no.: 
ISER Discussion Paper No. 1051
Abstract: 
We prove a generalized, multi-factor version of the Uzawa steady-state growth theorem. In the two-factor case, the theorem implies that a neoclassical growth model cannot be simultaneously consistent with empirical evidence on both capital-augmenting technical change and the elasticity of substitution between labor and reproducible capital. In the multi-factor case, balanced growth with capital-augmenting technical change is possible as long as capital has a unitary elasticity of substitution with any single non-reproducible factor, increasing the likelihood that neoclassical models can be consistent with empirical findings. To illustrate the importance of this result, we also build a three-factor growth model with endogenous and directed technical change and show that is has a stable balanced growth path with a strictly positive rate of capital-augmenting technical change.
Subjects: 
Endogenous Growth
Balanced Growth Path (BGP)
Uzawa Steady-State Growth Theorem
Direction of Technological Change
JEL: 
E13
E22
O33
O41
Document Type: 
Working Paper

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