
Accession Number : AD0248547
Title : ON A TWOSECTOR MODEL OF ECONOMIC GROWTH
Corporate Author : STANFORD UNIV CA APPLIED MATHEMATICS AND STATISTICS LABS
Personal Author(s) : UZAWA, HIROFUMI
Report Date : 28 NOV 1960
Pagination or Media Count : 1
Abstract : The growth process in a twosector model of capital accumulation and the stability problem of balanced growth equilibria under the neoclassical hypotheses was investigated. The competitive model of economic growth is formulated in terms of the aggregate production function which specifies the relationship between output and factors of production. Output is assumed to be composed of homogeneous quantities identical with capital, or at least price ratios between output and capital are assumed constant. The economy consists of two (over) types of goods, investmentgoods and consumptiongoods, to be produced by two factors of production, capital and labor; prices of investment goods and consumptiongoods are determined so as to satisfy the demand requirement. It is assumed that capital never depreciates, the rate of growth in labor is constant and exogenously determined, capitalists' income is solely spent on investmentgoods, that of laborers on consumptiongoods, and production is subject to the neoclassical conditions. Then a state of steady growth uniquely exists and the growth process, starting at an arbitrary capital and labor composition, approaches the steady growth, provided the consumptiongoods sector is more capitalintensive than the investmentgoods sector. An example of the twosector growth model in which the steady growth process is not stable is presented. (Author)
Descriptors : *ECONOMICS, GROWTH(PHYSIOLOGY), MATHEMATICAL ANALYSIS.
Distribution Statement : APPROVED FOR PUBLIC RELEASE