Reference : Steady-State Growth and the Elasticity of Substitution
Reports : External report
Business & economic sciences : Macroeconomics & monetary economics
Steady-State Growth and the Elasticity of Substitution
Irmen, Andreas mailto [University of Luxembourg > Faculty of Law, Economics and Finance (FDEF) > Center for Research in Economic Analysis (CREA) >]
CESifo Group Munich
[en] capital accumulation; elasticity of substitution; direction of technical change; neoclassical growth
[en] 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 the elasticity of substitution is a powerful engine 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.
Researchers ; Students
CESifo Working Paper Series

File(s) associated to this reference

Fulltext file(s):

Limited access
cesifo1_wp2955.pdfAuthor preprint369.47 kBRequest a copy

Bookmark and Share SFX Query

All documents in ORBilu are protected by a user license.