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Model of Optimal Economic Growth with Endogenous Bias

Published online by Cambridge University Press:  01 September 1999

Ryuzo Sato ,
Rama V. Ramachandran  and
Cheng Ping Lian
Ryuzo Sato
Affiliation:
Economics Department and Center for Japan-U.S. Business and Economic Studies, Stern School of Business
Rama V. Ramachandran
Affiliation:
Economics Department and Center for Japan-U.S. Business and Economic Studies, Stern School of Business
Cheng Ping Lian
Affiliation:
Council of Policy & Strategy
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Abstract

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The objective of the paper is to develop a model of optimal endogenous technological progress that will exhibit two properties sought in growth models: (1) The bias will depend on the parameters of the model—particularly those affecting the cost of inputs—instead of being constrained to be Harrod neutral; (2) factor shares will be constant in steady state. Using previously derived sufficient conditions, we show the conditions under which such a model can be constructed.

Keywords

Technological ProgressEndogenous BiasSteady State
Type
Research Article
Information
Macroeconomic Dynamics , Volume 3 , Issue 3 , September 1999 , pp. 293 - 310
Copyright
© 1999 Cambridge University Press