Revisting the Steady-State Equilibrium Conditions of Neoclassical Growth Models
Since the publication of Uzawa(1961), it has been widely accepted that technical change must be purely labor-augmenting for a growth model to exhibit steady-state path. But in this paper, we argue that such a constraint is unnecessary. Further, our model shows that, as long as the sum of the growth rate of marginal efficiency of capital accumulation and the rate of capital-augmenting technological progress equals zero, steady-state growth can be established without constraining the direction of technological change. Thus Uzawa’s theorem represents only a special case, and the explanatory power of growth models would be greatly enhanced if such a constraint is removed.
|Date of creation:||May 2013|
|Date of revision:||May 2013|
|Contact details of provider:|| Postal: Ludwigstraße 33, D-80539 Munich, Germany|
Web page: https://mpra.ub.uni-muenchen.de
More information through EDIRC
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.:
- Mussa, Michael L, 1977. "External and Internal Adjustment Costs and the Theory of Aggregate and Firm Investment," Economica, London School of Economics and Political Science, vol. 44(174), pages 163-178, May.
- Bailey, Roy E & Scarth, William M, 1980. "Adjustment Costs and Aggregate Demand Theory," Economica, London School of Economics and Political Science, vol. 47(188), pages 423-431, November.
- Foley, Duncan K & Sidrauski, Miguel, 1970.
"Portfolio Choice, Investment and Growth,"
American Economic Review,
American Economic Association, vol. 60(1), pages 44-63, March.
- D. K. Foley & M. Sidrauski, 1968. "Portfolio Choice, Investment, and Growth," Working papers 24, Massachusetts Institute of Technology (MIT), Department of Economics.
- Growiec, Jakub, 2010. "Knife-edge conditions in the modeling of long-run growth regularities," Journal of Macroeconomics, Elsevier, vol. 32(4), pages 1143-1154, December.
- Growiec, Jakub, 2008. "Knife-edge conditions in the modeling of long-run growth regularities," MPRA Paper 9956, University Library of Munich, Germany.
- Jakub Growiec, 2009. "Knife-Edge Conditions in the Modeling of Long-Run Growth Regularities," National Bank of Poland Working Papers 68, National Bank of Poland, Economic Institute.
- Daron Acemoglu, 2003. "Labor- And Capital-Augmenting Technical Change," Journal of the European Economic Association, MIT Press, vol. 1(1), pages 1-37, 03.
- Daron Acemoglu, 2000. "Labor- and Capital- Augmenting Technical Change," NBER Working Papers 7544, National Bureau of Economic Research, Inc.
- Charles I. Jones, 2005. "The Shape of Production Functions and the Direction of Technical Change," The Quarterly Journal of Economics, Oxford University Press, vol. 120(2), pages 517-549.
- Robert E. Lucas & Jr., 1967. "Adjustment Costs and the Theory of Supply," Journal of Political Economy, University of Chicago Press, vol. 75, pages 321-321. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:55045. 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: (Joachim Winter)
If references are entirely missing, you can add them using this form.