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A Generalized Uzawa Growth Theorem

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  • Gregory Casey
  • Ryo Horii

Abstract

We prove a generalized, multi-factor 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 1960-2000, but not the subsequent fall in the labor share.

Suggested Citation

  • Gregory Casey & Ryo Horii, 2023. "A Generalized Uzawa Growth Theorem," ISER Discussion Paper 1215, Institute of Social and Economic Research, Osaka University.
    • Handle: RePEc:dpr:wpaper:1215
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    1. Robert M. Solow, 1956. "A Contribution to the Theory of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 70(1), pages 65-94.
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    8. 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.
    9. Oded Galor, 2011. "Unified Growth Theory," Economics Books, Princeton University Press, edition 1, number 9477.
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    1. Hirano, Tomohiro & Toda, Alexis Akira, 2024. "Bubble economics," Journal of Mathematical Economics, Elsevier, vol. 111(C).

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