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A Generalized Uzawa Growth Theorem

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  • Gregory Casey
  • Ryo Horii

Abstract

We prove a generalized, multifactor version of the Uzawa steady-state growth theorem. Balanced growth with capital-augmenting technical change is possible when capital has a unitary elasticity of substitution with at least one other factor of production. Thus, a neoclassical growth model with three or more factors of production can be consistent with empirical evidence on both the capital-labor elasticity of substitution and the declining price of investment relative to consumption. In a three-factor model calibrated to US data, medium-run fluctuations in the investment price explain labor share movements from 1960 to 2000, but not the subsequent fall in the labor share.

Suggested Citation

  • Gregory Casey & Ryo Horii, 2024. "A Generalized Uzawa Growth Theorem," Journal of Political Economy Macroeconomics, University of Chicago Press, vol. 2(2), pages 336-373.
    • Handle: RePEc:ucp:jpemac:doi:10.1086/729034
    DOI: 10.1086/729034
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    Cited by:

    1. Casey, Gregory, 2024. "Unemployment and the direction of technical change," European Economic Review, Elsevier, vol. 168(C).
    2. Hirano, Tomohiro & Toda, Alexis Akira, 2024. "Bubble economics," Journal of Mathematical Economics, Elsevier, vol. 111(C).
    3. Irmen, Andreas, 2025. "Endogenous working hours, overlapping generations, and balanced neoclassical growth," Macroeconomic Dynamics, Cambridge University Press, vol. 29, pages 1-1, January.
    4. Manuel A. Gómez, 2024. "Elasticity of substitution, long‐run growth, and convergence speed: A general framework," International Journal of Economic Theory, The International Society for Economic Theory, vol. 20(3), pages 352-370, September.

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