Abstract
Abstract The Uzawa–Lucas model is a benchmark model in endogenous growth theory. But Lucas is so influential that the Uzawa–Lucas model is virtually the Lucas model. This article distinguishes between the Uzawa model and the Lucas model, and examines the Uzawa model in detail for the first time. It is certainly true that the two models have much in common. However, there are also important differences. Economically, in the Uzawa model, people choose between working in the production sector and working in the education sector, whereas in the Lucas model people choose between working in the production sector and not working in order to go to school. Mathematically, the potentially maximum growth rate must be smaller than the rate of time preference (less population growth) in the former, whereas the opposite must hold in the latter. This means that the two models are not applicable to the same economy.
Published Version
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