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Petr Duczynski
''A Note on the Imbalance Effect in the Uzawa-Lucas Model''
( 2007, Vol. 4 No.38 )
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.
JEL: D9 - Intertemporal Choice and Growth: General
O4 - Economic Growth and Aggregate Productivity: General
Manuscript Received : May 30 2007 Manuscript Accepted : Oct 09 2007

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