Note on global dynamics and imbalance effects in the Lucas–Uzawa model
(2008) International Journal of Economic Theory — Vol. 4, n° 4, p. 503-518 (2008)
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- Authors
- Abstract
- In the traditional literature on the Lucas–Uzawa model, it is proved that in the so-called normal parametric case, human capital stock grows at a rate greater than its long-run counterpart in the neighbourhood of the long-run balanced growth path. We first prove that the claim is true outside the neighborhood of balanced growth paths. More importantly, we identify a crucial asymmetry: whatever the parametric case considered, physical capital stock always grows at a rate lower than its long-run counterpart when the ratio of physical to human capital is above its long-run value.
- Affiliations
Universidad Complutense de Madrid Department of Economics University of Valencia Department of Economics
Citations
Boucekkine, R., Martínez, B., & Ruiz-Tamarit, J. R. (2008). Note on global dynamics and imbalance effects in the Lucas–Uzawa model. International Journal of Economic Theory, 4(4), 503-518. https://doi.org/10.1111/j.1742-7363.2008.00091.x (Original work published 2008)