Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
5098832 | Journal of Economic Dynamics and Control | 2011 | 14 Pages |
Abstract
In a neoclassical economy with endogenous capital- and labor-augmenting technical change the steady-state growth rate of output per worker is shown to increase in the elasticity of substitution between capital and labor. This confirms the assessment of Klump and de La Grandville (2000) that a greater elasticity of substitution allows for faster of economic growth. However, unlike their findings my result applies to the steady-state growth rate. Moreover, it does not hinge on particular assumptions on how aggregate savings come about. It holds for any household sector allowing savings to grow at the same rate as aggregate output.
Related Topics
Physical Sciences and Engineering
Mathematics
Control and Optimization
Authors
Andreas Irmen,