Munich Personal RePEc Archive

Revisting the Steady-State Equilibrium Conditions of Neoclassical Growth Models

Li, Defu and Huang, Jiuli and Zhou, Ying (2013): Revisting the Steady-State Equilibrium Conditions of Neoclassical Growth Models.

[img]
Preview
PDF
MPRA_paper_55045.pdf

Download (428kB) | Preview

Abstract

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.

UB_LMU-Logo
MPRA is a RePEc service hosted by
the Munich University Library in Germany.