Capital-Skill Complementarity and Balanced Growth

Capital-Skill Complementarity

Bibliographic Data

ID9727476
AuthorsLILIA MALIAR (0000-0002-7109-7976, Hoover Institution), SERGUEI MALIAR (0000-0002-8008-7147, Hoover Institution)
Year2011
Volume78
Issue310
Pages240-259
Publication date2011-04-01
Peer ReviewedYes
Open AccessYes
TypeARTICLE
VenueEconomica (JOURNAL)
Journal identifiersISSN: 0013-0427 • E-ISSN: 1468-0335
PublisherWiley (PUBLISHER • GB)
DOI10.1111/j.1468-0335.2009.00817.x
OpenAlexW2128577100
LanguageEN
References cited20

We construct a general equilibrium version of the Krusell et al. Econometrica 68, 1029, 2000 model with capital–skill complementarity. We assume several sources of growth simultaneously: exogenous growth of skilled and unskilled labour, equipment-specific technological progress, skilled and unskilled labour-augmenting technological progress and Hicks-neutral technological progress. We derive restrictions that make our model consistent with balanced growth. A calibrated version of our model can account for the key growth patterns in the US data, including those for capital equipment and structures, skilled and unskilled labour and output, but it fails to explain the long-run behaviour of skilled-labour wages and, consequently, the skill premium

Capital (architecture) · Complementarity (molecular biology) · Economics · General equilibrium theory · Growth model · Labour economics · Macroeconomics · Microeconomics · Technological change · Economic Growth and Productivity · Economic theories and models · Fiscal Policy and Economic Growth

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