[Can the Steady-State Path of Neoclassical Growth Model Embrace Capital-Augmenting Technological Progress?]
The celebrated Uzawa(1961) theorem holds that，on the steady-growth path of neoclassical growth model，technological progress must be purely labor-augmenting rather than capital-augmenting，except the special case where the production function takes the form of Cobb-Douglas. With an augmented Ramsey model，however，we prove in this paper that，when investment has adjustment cost which correlates positively with capital-augmenting technology，the steady state growth path can also embrace capital-augmenting technological progress，even if the production function is not Cobb-Douglas. Our conclusions contribute to the study of steady-state condition of neoclassical growth model，and the understanding of the roles of capital and capital-augmenting technology progress in economic growth.
|Date of creation:||Oct 2012|
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- Foley, Duncan K & Sidrauski, Miguel, 1970.
"Portfolio Choice, Investment and Growth,"
American Economic Review,
American Economic Association, vol. 60(1), pages 44-63, March.
- Robert E. Lucas & Jr., 1967. "Adjustment Costs and the Theory of Supply," Journal of Political Economy, University of Chicago Press, vol. 75, pages 321.
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