International Journal of Economics and Business Administration
Articles Information
International Journal of Economics and Business Administration, Vol.7, No.4, Dec. 2021, Pub. Date: Nov. 22, 2021
A Contribution to the Balanced Growth Path Theory of Economic Growth
Pages: 131-142 Views: 33 Downloads: 14
Authors
[01] Diana Loubaki, Superior Institute of Management, Department of Economics, Marien Ngouabi University, Brazzaville, Congo Republic.
Abstract
This paper renews the balanced growth path notion of economic growth originally based on Uzawa’s theorem which stipulates that, despite of investment, the balanced growth path, may not exist and must be checked over time. Indeed, the balanced growth path existence is guarantee since the elasticity of substitution between capital and labour equals one, otherwise, it is not and deserves forces for it to exist. The growth literature identifies thus, human capital accumulation to be one of the required forces allowing the balanced growth path existence, thus this article highlights another one, which is automation no more based on the elasticity on substitution level like before when input augmenting technological change is used. So that, in this paper, using the both methods of the balanced growth path emergence evocated, we show several things which are, first when national income factor shares in labor is heterogenous and input augmenting technological change used, second, when machines and unskilled labour share tasks automation are used in an OLG model, where innovations keep rising and capital-skills continuously introduced, labour skills decrease, thus make the unskilled leave the labor market and the engineers switch from production to research. Since, additional power for the BGP existence i.e, ability at work and human capital increase are conducted then, machines’ workers exhibit a threshold ensuring long-run growth emergence and social stability.
Keywords
Balanced Growth, Equilibrium, Task Automation, Input Augmenting Technology
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