[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/p/ces/ceswps/_4477.html
   My bibliography  Save this paper

A Generalized Steady-State Growth Theorem

Author

Listed:
  • Andreas Irmen
Abstract
Uzawa’s steady-state growth theorem (Uzawa (1961)) is generalized to a neoclassical economy that uses current output, e. g., to create technical progress or to manufacture intermediates. The difference between aggregate final-good production and these resources is referred to as net output. The new generalized steady-state growth theorem holds since net output exhibits constant returns to scale in capital and labor. This insight provides an understanding for why technical change is labor-augmenting in steady state even if capital-augmenting technical change is feasible. By example, this point is made for three recent growth models that allow for endogenous capital- and labor-augmenting technical change, namely, Irmen (2013), Acemoglu (2003), and Acemoglu (2009), Chapter 15. The reduced form of these models is shown to be consistent with the generalized steady-state growth theorem.

Suggested Citation

  • Andreas Irmen, 2013. "A Generalized Steady-State Growth Theorem," CESifo Working Paper Series 4477, CESifo.
    • Handle: RePEc:ces:ceswps:_4477
    as

    Download full text from publisher

    File URL: https://www.cesifo.org/DocDL/cesifo1_wp4477.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. H. Uzawa, 1961. "Neutral Inventions and the Stability of Growth Equilibrium," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 28(2), pages 117-124.
    2. Robert M. Solow, 1956. "A Contribution to the Theory of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 70(1), pages 65-94.
    3. Romer, Paul M, 1990. "Endogenous Technological Change," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 71-102, October.
    4. Ekkehart Schlicht, 2006. "A Variant of Uzawa's Theorem," Economics Bulletin, AccessEcon, vol. 5(6), pages 1-5.
    5. Daron Acemoglu, 2003. "Labor- And Capital-Augmenting Technical Change," Journal of the European Economic Association, MIT Press, vol. 1(1), pages 1-37, March.
    6. Irmen, Andreas & Tabaković, Amer, 2017. "Endogenous capital- and labor-augmenting technical change in the neoclassical growth model," Journal of Economic Theory, Elsevier, vol. 170(C), pages 346-384.
    7. Irmen, Andreas, 2011. "Steady-state growth and the elasticity of substitution," Journal of Economic Dynamics and Control, Elsevier, vol. 35(8), pages 1215-1228, August.
    8. T. W. Swan, 1956. "ECONOMIC GROWTH and CAPITAL ACCUMULATION," The Economic Record, The Economic Society of Australia, vol. 32(2), pages 334-361, November.
    9. Charles I. Jones, 2005. "The Shape of Production Functions and the Direction of Technical Change," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 120(2), pages 517-549.
    10. Klump, Rainer & McAdam, Peter & Willman, Alpo, 2004. "Factor substitution and factor augmenting technical progress in the US: a normalized supply-side system approach," Working Paper Series 367, European Central Bank.
    11. Charles I. Jones & Dean Scrimgeour, 2008. "A New Proof of Uzawa's Steady-State Growth Theorem," The Review of Economics and Statistics, MIT Press, vol. 90(1), pages 180-182, February.
    12. Duffy, John & Papageorgiou, Chris, 2000. "A Cross-Country Empirical Investigation of the Aggregate Production Function Specification," Journal of Economic Growth, Springer, vol. 5(1), pages 87-120, March.
    13. repec:bla:econom:v:69:y:2002:i:273:p:155-71 is not listed on IDEAS
    14. Miguel-Angel Martín & Agustín Herranz, 2004. "Human capital and economic growth in Spanish regions," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 10(4), pages 257-264, November.
    15. Rainer Klump & Peter McAdam & Alpo Willman, 2007. "Factor Substitution and Factor-Augmenting Technical Progress in the United States: A Normalized Supply-Side System Approach," The Review of Economics and Statistics, MIT Press, vol. 89(1), pages 183-192, February.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Andreas Irmen, 2021. "Automation, growth, and factor shares in the era of population aging," Journal of Economic Growth, Springer, vol. 26(4), pages 415-453, December.
    2. Roberto Veneziani & Luca Zamparelli & Daniele Tavani & Luca Zamparelli, 2017. "Endogenous Technical Change In Alternative Theories Of Growth And Distribution," Journal of Economic Surveys, Wiley Blackwell, vol. 31(5), pages 1272-1303, December.
    3. Li, Defu & Bental, Benjamin & Huang, Jiuli, 2016. "Stationary Growth and the Impossibility of Capital Efficiency Gains," MPRA Paper 71516, University Library of Munich, Germany.
    4. Andreas Irmen & Amer Tabakovic, 2016. "Factor Income Distribution and Endogenous Economic Growth - When Piketty meets Romer -," DEM Discussion Paper Series 16-18, Department of Economics at the University of Luxembourg.
    5. Growiec, Jakub & McAdam, Peter & Mućk, Jakub, 2018. "Endogenous labor share cycles: Theory and evidence," Journal of Economic Dynamics and Control, Elsevier, vol. 87(C), pages 74-93.
    6. Andreas Irmen, 2013. "Adjustment costs in a variant of Uzawa's steady-state growth theorem," Economics Bulletin, AccessEcon, vol. 33(4), pages 2860-2873.
    7. Andreas Irmen & Amer Tabakovic, 2020. "Factor Income Distribution And Endogenous Economic Growth: Piketty Meets Romer," Economic Inquiry, Western Economic Association International, vol. 58(3), pages 1342-1361, July.
    8. Andreas Irmen, 2017. "Capital‐ And Labor‐Saving Technical Change In An Aging Economy," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 58(1), pages 261-285, February.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Irmen, Andreas, 2011. "Steady-state growth and the elasticity of substitution," Journal of Economic Dynamics and Control, Elsevier, vol. 35(8), pages 1215-1228, August.
    2. Gregory Casey & Ryo Horii, 2019. "A Multi-factor Uzawa Growth Theorem and Endogenous Capital-Augmenting Technological Change," ISER Discussion Paper 1051, Institute of Social and Economic Research, Osaka University.
    3. Growiec, Jakub & McAdam, Peter & Mućk, Jakub, 2018. "Endogenous labor share cycles: Theory and evidence," Journal of Economic Dynamics and Control, Elsevier, vol. 87(C), pages 74-93.
    4. Rainer Klump & Peter McAdam & Alpo Willman, 2012. "The Normalized Ces Production Function: Theory And Empirics," Journal of Economic Surveys, Wiley Blackwell, vol. 26(5), pages 769-799, December.
    5. Irmen Andreas, 2020. "Endogenous task-based technical change—factor scarcity and factor prices," Economics and Business Review, Sciendo, vol. 6(2), pages 81-118, June.
    6. Gregory Casey, 2018. "Technology-Driven Unemployment," 2018 Meeting Papers 302, Society for Economic Dynamics.
    7. Li, Defu & Bental, Benjamin, 2023. "What determines the Direction of Technological Progress(2023.11.16)?," MPRA Paper 119211, University Library of Munich, Germany, revised 16 Nov 2023.
    8. Li, Defu & Bental, Benjamin, 2019. "A Generalized Growth Model and the Direction of Technological Progress," MPRA Paper 96509, University Library of Munich, Germany.
    9. Ekkehart Schlicht, 2016. "Directed Technical Change and Capital Deepening: A Reconsideration of Kaldor's Technical Progress Function," Metroeconomica, Wiley Blackwell, vol. 67(1), pages 119-151, February.
    10. Ekaterina Ponomareva & Alexandra Bozhechkova & Alexandr Knobel, 2012. "Factors of Economic Growth," Published Papers 172, Gaidar Institute for Economic Policy, revised 2013.
    11. Michael Knoblach & Fabian Stöckl, 2020. "What Determines The Elasticity Of Substitution Between Capital And Labor? A Literature Review," Journal of Economic Surveys, Wiley Blackwell, vol. 34(4), pages 847-875, September.
    12. Growiec, Jakub, 2013. "Factor-augmenting technology choice and monopolistic competition," Journal of Macroeconomics, Elsevier, vol. 38(PA), pages 86-94.
    13. Irmen, Andreas & Tabaković, Amer, 2017. "Endogenous capital- and labor-augmenting technical change in the neoclassical growth model," Journal of Economic Theory, Elsevier, vol. 170(C), pages 346-384.
    14. Li, Defu & Benjamin, Bental, 2021. "Factor Supply Elasticities, Returns to Scale, and the Direction of Technological Progress," MPRA Paper 109920, University Library of Munich, Germany.
    15. de la Fonteijne, Marcel R., 2018. "Why the concept of Hicks, Harrod, Solow neutral and even non-neutral augmented technical progress is flawed in principle in any economic model," MPRA Paper 107730, University Library of Munich, Germany.
    16. Gene M. Grossman & Elhanan Helpman & Ezra Oberfield & Thomas Sampson, 2017. "Balanced Growth Despite Uzawa," American Economic Review, American Economic Association, vol. 107(4), pages 1293-1312, April.
    17. Jakub Growiec, 2008. "A new class of production functions and an argument against purely labor‐augmenting technical change," International Journal of Economic Theory, The International Society for Economic Theory, vol. 4(4), pages 483-502, December.
    18. Kemnitz, Alexander & Knoblach, Michael, 2020. "Endogenous sigma-augmenting technological change: An R&D-based approach," CEPIE Working Papers 02/20, Technische Universität Dresden, Center of Public and International Economics (CEPIE).
    19. Mallick, Debdulal, 2012. "The role of the elasticity of substitution in economic growth: A cross-country investigation," Labour Economics, Elsevier, vol. 19(5), pages 682-694.
    20. Miguel A. León-Ledesma & Peter McAdam & Alpo Willman, 2010. "Identifying the Elasticity of Substitution with Biased Technical Change," American Economic Review, American Economic Association, vol. 100(4), pages 1330-1357, September.

    More about this item

    Keywords

    steady-state growth; capital accumulation; Uzawa's Theorem; endogenous direction of technical change;
    All these keywords.

    JEL classification:

    • E10 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - General
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ces:ceswps:_4477. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Klaus Wohlrabe (email available below). General contact details of provider: https://edirc.repec.org/data/cesifde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.