Abstract
In this paper, a two-sector growth model with optimal labor force and capital allocation is given. By treating the quantities of the labor force and capital in the consumption production sector as the control variables in the model, we obtain a two-dimension dynamical system from solving the household utility maximum problem. It is proved that the system has a unique nonzero equilibrium which is a saddle, so there exists an optimal labor force and capital allocation process in the economic growth. The capital accumulation and consumption production strictly increase along the growth path. At the end of this paper, a numerical computation is given to present the allocation process of capital and labor.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
