Elasticity of Substitution and Growth: Normalized CES in the Diamond Model
It is often asserted that the more substitutable capital and labor are in the aggregate production the more rapidly an economy grows. Recently this has been formally confirmed within the Solow model by Klump and de La Grandville (2000). This paper demonstrates that there exists no such monotonic relationship between factor substitutability and growth in the Diamond overlapping-generations model. In particular, we prove that, if capital and labor are relatively substitutable, a country with a greater elasticity of substitution exhibits lower per capita output growth in transit and in steady state. Copyright Springer-Verlag Berlin Heidelberg 2003
(This abstract was borrowed from another version of this item.)
|Date of creation:||Feb 2001|
|Contact details of provider:|| Postal: Baton Rouge, LA 70803-6306|
Web page: http://www.business.lsu.edu/economics
More information through EDIRC
References listed on IDEAS
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.:
- Galor, Oded, 1996.
"Convergence? Inferences from Theoretical Models,"
Royal Economic Society, vol. 106(437), pages 1056-1069, July.
- Galor, Oded, 1996. "Convergence? Inferences from Theoretical Models," CEPR Discussion Papers 1350, C.E.P.R. Discussion Papers.
- Oded Galor, 1996. "Convergence?: Inferences from Theoretical Models," Working Papers 96-3, Brown University, Department of Economics.
When requesting a correction, please mention this item's handle: RePEc:lsu:lsuwpp:2001-05. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If references are entirely missing, you can add them using this form.