Equilibrium Dynamics in a Two-Sector Model with Taxes
AbstractIn this paper we are concerned with the equilibrium dynamics of a two-sector model of endogenous growth with distortionary taxes. We show that for certain parameters values and tax schemes every equilibrium orbit--except the steady state solution--is non-interior; i.e., there are times in which one of the sectors is inactive. This analysis confirms that in multisector models the set of easily checkable, universal conditions that can guarantee the interiority of equilibrium solutions is rather limited.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Elsevier in its journal Journal of Economic Theory.
Volume (Year): 105 (2002)
Issue (Month): 1 (July)
Contact details of provider:
Web page: http://www.elsevier.com/locate/inca/622869
Other versions of this item:
- Ortigueira, Salvador & Santos, Manuel S., 2001. "Equilibrium Dynamics in a Two-Sector Model with Taxes," Working Papers 01-17, Cornell University, Center for Analytic Economics.
- Manuel Santos & Salvador Ortigueira, . "Equilibrium Dynamics in a Two-Sector Model with Taxes," Working Papers 2133332, Department of Economics, W. P. Carey School of Business, Arizona State University.
- D90 - Microeconomics - - Intertemporal Choice - - - General
- E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Capital; Investment; Capacity
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Matsuyama, K., 1996.
"Growing through cycles,"
DELTA Working Papers
96-18, DELTA (Ecole normale supérieure).
- Rebelo, Sergio, 1991.
"Long-Run Policy Analysis and Long-Run Growth,"
Journal of Political Economy,
University of Chicago Press, vol. 99(3), pages 500-521, June.
- Salvador Ortigueira, 1999. "Equilibrium Indeterminacy in an Endogenous Growth Model: Debt as a Coordination Device," Working Papers 9901, Centro de Investigacion Economica, ITAM.
- Eric W. Bond & Ping Wang & Chong K. Yip, 1993.
"A general two-sector model of endogenous growth with human and physical capital: balanced growth and transitional dynamics,"
9324, Federal Reserve Bank of Dallas.
- Bond, Eric W. & Wang, Ping & Yip, Chong K., 1996. "A General Two-Sector Model of Endogenous Growth with Human and Physical Capital: Balanced Growth and Transitional Dynamics," Journal of Economic Theory, Elsevier, vol. 68(1), pages 149-173, January.
- Ladron-de-Guevara, Antonio & Ortigueira, Salvador & Santos, Manuel S., 1997.
"Equilibrium dynamics in two-sector models of endogenous growth,"
Journal of Economic Dynamics and Control,
Elsevier, vol. 21(1), pages 115-143, January.
- Antonio Ladron de Guevara & Salvador Ortigueira & Manuel S. Santos, 1994. "Equilibrium Dynamics in Two-Sector Models of Endogenous Growth," Working Papers 9403, Centro de Investigacion Economica, ITAM.
- Nancy L. Stokey & Sergio Rebelo, 1993.
"Growth Effects of Flat-Rate Taxes,"
NBER Working Papers
4426, National Bureau of Economic Research, Inc.
- Ellen R. McGrattan & James A. Schmitz, Jr., 1998.
"Explaining cross-country income differences,"
250, Federal Reserve Bank of Minneapolis.
- Casey B. Mulligan & Xavier Sala-i-Martin, 1992.
"Transitional Dynamics in Two-Sector Models of Endogenous Growth,"
NBER Working Papers
3986, National Bureau of Economic Research, Inc.
- Mulligan, Casey B & Sala-i-Martin, Xavier, 1993. "Transitional Dynamics in Two-Sector Models of Endogenous Growth," The Quarterly Journal of Economics, MIT Press, vol. 108(3), pages 739-73, August.
- Mulligan, C.B. & Sala-i-Martin, X., 1992. "Transitional Dynamics in Two-Sector Models of Endogenous Growth," Papers 651, Yale - Economic Growth Center.
- Santos, Manuel S., 2004. "Simulation-based estimation of dynamic models with continuous equilibrium solutions," Journal of Mathematical Economics, Elsevier, vol. 40(3-4), pages 465-491, June.
- Kei Hosoya, 2003. "Tax financed government health expenditure and growth with capital deepening externality," Economics Bulletin, AccessEcon, vol. 5(14), pages 1-10.
- Hyun Park, 2009. "Ramsey fiscal policy and endogenous growth," Economic Theory, Springer, vol. 39(3), pages 377-398, June.
- Stephen Turnovsky & Cecilia Garcia Penalosa, 2006.
"The Dynamics of Wealth and Income distribution in a Neoclassical Growth Model,"
Computing in Economics and Finance 2006
318, Society for Computational Economics.
- Stephen J. Turnovsky & Cecilia Garcia-Pe–alosa, 2006. "The Dynamics of Wealth and Income Distribution in a Neoclassical Growth Model," IDEP Working Papers 0604, Institut d'economie publique (IDEP), Marseille, France, revised Jul 2006.
- Garcia-Belenguer, Fernando, 2007. "Stability, global dynamics and Markov equilibrium in models of endogenous economic growth," Journal of Economic Theory, Elsevier, vol. 136(1), pages 392-416, September.
- Turnovsky, Stephen J. & Garcia-Peñalosa, Cecilia, 2008. "Distributional dynamics in a neoclassical growth model: The role of elastic labor supply," Journal of Economic Dynamics and Control, Elsevier, vol. 32(5), pages 1399-1431, May.
- Wei-Bin Zhang, 2010. "Growth, economic structure, and residential distribution of a small city," International Review of Economics, Springer, vol. 57(1), pages 47-78, March.
- Dirk Bethmann, 2007. "Homogeneity, Saddle Path Stability, and Logarithmic Preferences in Economic Models," Discussion Paper Series 0702, Institute of Economic Research, Korea University.
- repec:ebl:ecbull:v:5:y:2003:i:14:p:1-10 is not listed on IDEAS
- Reinhorn Leslie J., 2009.
"Dynamic Optimal Taxation with Human Capital,"
The B.E. Journal of Macroeconomics,
De Gruyter, vol. 9(1), pages 1-21, October.
- Leslie Reinhorn, 2004. "Dynamic optimal taxation with human capital," Money Macro and Finance (MMF) Research Group Conference 2003 77, Money Macro and Finance Research Group.
- Manuel S. Santos, 2003. "Simulation-Based Estimation Of Dynamic Models With Continuous Equilibrium Solutions," Economics Working Papers we034716, Universidad Carlos III, Departamento de Economía.
- García-Belenguer, Fernando, 2006. "Stability, Global Dynamics and Markov Equilibrium in Models of Economic Growth," Working Papers in Economic Theory 2006/05, Universidad Autónoma de Madrid (Spain), Department of Economic Analysis (Economic Theory and Economic History).
- Duernecker, Georg, 2007. "Growth Effects of Consumption Jealousy in a Two-Sector Model," Economics Series 201, Institute for Advanced Studies.
- Santos, Manuel S., 2002. "On Non-existence of Markov Equilibria in Competitive-Market Economies," Journal of Economic Theory, Elsevier, vol. 105(1), pages 73-98, July.
- Ghiglino, Christian, 2002. "Introduction to a General Equilibrium Approach to Economic Growth," Journal of Economic Theory, Elsevier, vol. 105(1), pages 1-17, July.
- Hu, Yunfang & Mino, Kazuo, 2004. "Fiscal Policy, Home Production and Growth Dynamics," MPRA Paper 17017, University Library of Munich, Germany.
- Manuel Santos, . "On Non-Existence of Markov Equilibria in Competitive-Market Economies," Working Papers 2133305, Department of Economics, W. P. Carey School of Business, Arizona State University.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei).
If references are entirely missing, you can add them using this form.