A production-based asset pricing model is developed in which growth is sustained through investment in human capital, which itself obsolesces over time. The model is used to examine the effects on the business cycle properties of asset returns fo decisions to invest in physical capital when the...

The endogenous growth models of Lucas (1988) and Uzawa (1965) that rely on a formal training technology to generate growth, and the endogenous technologiacl change model of Romer (1990) fit the long-run secular growth path of the US economy equally well. However, the Romer model yields...