A Note on the Imbalance Effect in the Uzawa-Lucas Model

The Uzawa-Lucas model is believed to yield a positive dependence of the output growth on the ratio of human capital to physical capital (an empirically plausible imbalance effect). We show that the imbalance effect become less plausible for a low physical capital share and a low elasticity of intertemporal substitution. In particular, the model is inconsistent with empirical observations for a relatively broad range of realistic parameter specifications.

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Year of publication:	2007-10-09
Authors:	Duczynski, Petr
Published in:	Economics Bulletin. - AccessEcon, ISSN 1545-2921. - Vol. 4.2007, 38, p. 1-12
Publisher:	AccessEcon

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Extent:	application/pdf
Type of publication:	Article
Classification:	D9 - Intertemporal Choice and Growth ; O4 - Economic Growth and Aggregate Productivity
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10010629198