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How Uzawa differs from Lucas
[A model of growth through creative destruction]

Author

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  • Kazuyuki Sasakura

Abstract

The Uzawa–Lucas model is a benchmark model in endogenous growth theory. But Lucas is so influential that the Uzawa–Lucas model is virtually the Lucas model. This article distinguishes between the Uzawa model and the Lucas model, and examines the Uzawa model in detail for the first time. It is certainly true that the two models have much in common. However, there are also important differences. Economically, in the Uzawa model, people choose between working in the production sector and working in the education sector, whereas in the Lucas model people choose between working in the production sector and not working in order to go to school. Mathematically, the potentially maximum growth rate must be smaller than the rate of time preference (less population growth) in the former, whereas the opposite must hold in the latter. This means that the two models are not applicable to the same economy.

Suggested Citation

  • Kazuyuki Sasakura, 2022. "How Uzawa differs from Lucas [A model of growth through creative destruction]," Oxford Economic Papers, Oxford University Press, vol. 74(4), pages 1214-1227.
    • Handle: RePEc:oup:oxecpp:v:74:y:2022:i:4:p:1214-1227.
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    File URL: http://hdl.handle.net/10.1093/oep/gpab059
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    Cited by:

    1. Kazuyuki SASAKURA, 2023. "Optimal Schooling for Economic Growth," Working Papers 2302, Waseda University, Faculty of Political Science and Economics.

    More about this item

    JEL classification:

    • E13 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Neoclassical
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth

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