A Note on Balanced Growth with a less than unitary Elasticity of Substitution
AbstractWe 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.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Department of Economics, University of Kent in its series Studies in Economics with number 1007.
Date of creation: Aug 2010
Date of revision:
Contact details of provider:
Postal: Department of Economics, University of Kent at Canterbury, Canterbury, Kent, CT2 7NP
Phone: +44 (0)1227 764000
Fax: +44 (0)1227 827850
Web page: http://www.ukc.ac.uk/economics/
Find related papers by JEL classification:
- E25 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Aggregate Factor Income Distribution
- O33 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
- O40 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-09-11 (All new papers)
- NEP-DGE-2010-09-11 (Dynamic General Equilibrium)
- NEP-FDG-2010-09-11 (Financial Development & Growth)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Hernando Zuleta, 2008.
"Factor Saving Innovations and Factor Income Shares,"
Review of Economic Dynamics,
Elsevier for the Society for Economic Dynamics, vol. 11(4), pages 836-851, October.
- Hernando Zuleta, 2006. "Factor saving innovations and factor income shares," DOCUMENTOS DE TRABAJO 002706, UNIVERSIDAD DEL ROSARIO.
- Miguel A. Le�n-Ledesma & Peter McAdam & Alpo Willman, 2010.
"Identifying the Elasticity of Substitution with Biased Technical Change,"
American Economic Review,
American Economic Association, vol. 100(4), pages 1330-57, September.
- León-Ledesma, Miguel A. & McAdam, Peter & Willman, Alpo, 2009. "Identifying the elasticity of substitution with biased technical change," Working Paper Series 1001, European Central Bank.
- Zeira, Joseph, 1995.
"Workers, Machines and Economic Growth,"
CEPR Discussion Papers
1139, C.E.P.R. Discussion Papers.
- Charles I. Jones & Dean Scrimgeour, 2008. "A New Proof of Uzawa's Steady-State Growth Theorem," The Review of Economics and Statistics, MIT Press, vol. 90(1), pages 180-182, February.
- Cantore, C. & Levine, P., 2012.
"Getting normalization right: Dealing with ‘dimensional constants’ in macroeconomics,"
Journal of Economic Dynamics and Control,
Elsevier, vol. 36(12), pages 1931-1949.
- Cantore, Cristiano & Levine, Paul, 2011. "Getting Normalization Right: Dealing with ‘Dimensional Constants’ in Macroeconomics," Dynare Working Papers 9, CEPREMAP.
- Cristiano Cantore & Paul Levine, 2011. "Getting Normalization Right: Dealing with 'Dimensional Constants' in Macroeconomics," School of Economics Discussion Papers 0511, School of Economics, University of Surrey.
- Rainer Klump & Peter McAdam & Alpo Willman, 2012.
"The Normalized Ces Production Function: Theory And Empirics,"
Journal of Economic Surveys,
Wiley Blackwell, vol. 26(5), pages 769-799, December.
- Klump, Rainer & McAdam, Peter & Willman, Alpo, 2011. "The normalized CES production function: theory and empirics," Working Paper Series 1294, European Central Bank.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Emma Robinson).
If references are entirely missing, you can add them using this form.