Capital-Skill Complementarity And Steady-State Growth
AbstractWe construct a general-equilibrium version of Krusell, Ohanian, Ríos-Rulland Violante’s (2000) model with capital-skill complementarity. To account forgrowth patterns observed in the data, we assume several sources of growthsimultaneously, specifically, exogenous growth of skilled and unskilled labor,equipment-specific technological progress, skilled and unskilled labor-augmentingtechnological progress and Hicks-neutral technological progress. We deriverestrictions that make our model consistent with steady-state growth. A calibratedversion of our model is able to account for the key growth patterns in the U.S. data,including those for capital equipment and structures, skilled and unskilled laborand output, but it fails to explain the long-run behavior of the skill premium.
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Bibliographic InfoPaper provided by Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie) in its series Working Papers. Serie AD with number 2006-15.
Length: 28 pages
Date of creation: Jul 2006
Date of revision:
Publication status: Published by Ivie
capital-skill complementarity; steady state growth; skill premium; growth model.;
Find related papers by JEL classification:
- C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
- D90 - Microeconomics - - Intertemporal Choice - - - General
- E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-08-05 (All new papers)
- NEP-HRM-2006-08-05 (Human Capital & Human Resource Management)
- NEP-MAC-2006-08-05 (Macroeconomics)
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