A Generalized Steady-State Growth Theorem

Irmen, Andreas

doi:10.1017/s1365100516000407

Cited by 12 publications

(9 citation statements)

References 26 publications

(54 reference statements)

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“…The intuition behind this finding is linked to the logic of the generalized steady‐state growth theorem devised in Irmen (). This theorem generalizes Uzawa's steady‐state growth theorem (Uzawa, ) to endogenous‐growth economies including the one studied in this article.…”

Section: Introductionmentioning

confidence: 99%

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Capital‐ and Labor‐saving Technical Change in an Aging Economy

Irmen

2017

Int Economic Review

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Does population aging and the associated increase in the old-age dependency ratio affect economic growth? The answer is given in a novel analytical framework that allows for population aging to affect endogenous capital-and labor-saving technical change. In a steady state capital-saving technical progress vanishes, and the economy's growth rate of per-capita variables reflects only labor-saving technical change. The mere possibility of capital-saving technical change is shown to imply that the economy's steady-state growth rate becomes independent of its age structure: Neither a higher life expectancy nor a decline in fertility affects economic growth in the long run.

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Section: Introductionmentioning

confidence: 99%

“…Hence, in steady state, there is no growth of capital‐saving technological knowledge. See Irmen () for a discussion of the conceptual underpinning of this result.…”

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confidence: 99%

Capital‐ and Labor‐saving Technical Change in an Aging Economy

Irmen

2017

Int Economic Review

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“…Although the theorem is well known, Uzawa (1961) does not provide a clear statement of proof of the theorem. A simple and intuitive proof was proposed by Schlicht (2006) and updated by Jones and Scrimgeour (2008), Acemoglu (2008), and Irmen (2016). We contribute to this literature by extending the theorem to multiple factors of production and a wider class of neoclassical models.…”

Section: Introductionmentioning

confidence: 75%

A Multi-Factor Uzawa Growth Theorem And Endogenous Capital-Augmenting Technological Change

Casey

Horii

2019

SSRN Journal

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We prove a generalized, multi-factor version of the Uzawa steady state growth theorem. In the two-factor case, the theorem implies that a neoclassical growth model cannot be simultaneously consistent with empirical evidence on both capital-augmenting technical change and the elasticity of substitution between labor and reproducible capital. In the multi-factor case, balanced growth with capital-augmenting technical change is possible as long as capital has a unitary elasticity of substitution with any single non-reproducible factor, significantly increasing the likelihood that neoclassical models can be consistent with empirical findings. To illustrate the importance of this result, we also build a three-factor growth model with endogenous and directed technical change and show that is has a locally stable balanced growth path with a strictly positive rate of capital-augmenting technical change. and the production function is given by Y t =F (K t , ·; t). Suppose that the growth factor of

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“…In general, technological change can be represented by changes in the productivity of both labor and capital. However, balanced growth with constant returns to scale in production requires g B ⌘Ḃ/B = 0, or constant capital productivity in the long run, as shown by Uzawa (1961), and recently re-emphasized by others (Schlicht, 2006;Jones and Scrimgeour, 2008;Irmen, 2016). For this reason, most models (with the exceptions discussed in Sections 4.3 and 6) simply assume a constant output/capital ratio, and deal only with the growth rate of labor productivity g A .…”

Section: Approaches To Technical Changementioning

confidence: 99%

Endogenous Technical Change in Alternative Theories of Growth and Distribution

Tavani

Zamparelli

2018

Analytical Political Economy

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This paper surveys the last two and a half decades of non-neoclassical literature on endogenous technical change and the factor distribution of income. The implications of classical-Marxian and post-Keynesian contributions are compared with neoclassical exogenous and endogenous growth theories. We find the comparison illuminating in several respects: despite the strong differences in the assumptions regarding the substitutability between capital and labor, the role of different classes in society, and whether or not productive factors are fully employed, the various alternative models can be classified in a way that highlights remarkable similarities with their neoclassical counterparts. Both neoclassical and alternative theories of endogenous growth: (i) have shown that long-run growth is sensitive to investment decisions; (ii) rely on a linear spillover from the stock of knowledge to the production of innovations, and (iii) match the Kaldor facts in the long run. The comparison allows to evaluate competing theories by looking at the different channels they emphasize: saving behavior and market structure in the neoclassical theories, as opposed to income distribution, the state of the labor market, and investors' behavior in alternative theories.

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A Generalized Steady-State Growth Theorem

Cited by 12 publications

References 26 publications

Capital‐ and Labor‐saving Technical Change in an Aging Economy

Capital‐ and Labor‐saving Technical Change in an Aging Economy

A Multi-Factor Uzawa Growth Theorem And Endogenous Capital-Augmenting Technological Change

Endogenous Technical Change in Alternative Theories of Growth and Distribution

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