Capital-Skill Complementarity And Steady-State Growth
We 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.
|Date of creation:||Jul 2006|
|Publication status:||Published by Ivie|
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