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Balanced growth and degrowth with human capital

Author

Listed:
  • Stefano Bosi

    (EPEE - Centre d'Etudes des Politiques Economiques - UEVE - Université d'Évry-Val-d'Essonne - Université Paris-Saclay)

  • Carmen Camacho

    (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

  • Thai Ha-Huy

    (EPEE - Centre d'Etudes des Politiques Economiques - UEVE - Université d'Évry-Val-d'Essonne - Université Paris-Saclay)

Abstract

In a simple discrete-time version of Lucas (1988) we find that the Balanced Growth Path (BGP) is always the unique optimal planner's solution: with linear or strictly concave production functions, with unbounded utility functions, with or without human capital depreciation. When the "speed" of human capital accumulation is high, the optimal working time is constant and below its upper bound. Capital grows at a constant factor, but degrowth is also possible when this factor is less one (under positive capital depreciation). When this speed is low, optimal working time is at its boundary and capital declines at its depreciation factor (degrowth).

Suggested Citation

  • Stefano Bosi & Carmen Camacho & Thai Ha-Huy, 2023. "Balanced growth and degrowth with human capital," PSE-Ecole d'économie de Paris (Postprint) halshs-04805609, HAL.
    • Handle: RePEc:hal:pseptp:halshs-04805609
    DOI: 10.1016/j.econlet.2023.111348
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-04805609v1
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    References listed on IDEAS

    as
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    Keywords

    Human capital; Balanced growth path;

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