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Delay two-sector economic growth model with a Cobb–Douglas production function

Author

Listed:
  • Akio Matsumoto

    (Chuo University)

  • Ferenc Szidarovszky

    (Corvinus University)

Abstract

This study demonstrates the possibility of cyclic capital accumulation in the case in which there are delays in capital implementation and estimation of capital depreciation. For this purpose, a two-sector growth model with Cobb–Douglas production function is built. It is shown that the stability of the balanced growth may change as lengths of delay change. It is also shown that on the stability switching curve the stability is lost and bifurcates to a limit cycle via a Hopf bifurcation.

Suggested Citation

  • Akio Matsumoto & Ferenc Szidarovszky, 2021. "Delay two-sector economic growth model with a Cobb–Douglas production function," Decisions in Economics and Finance, Springer;Associazione per la Matematica, vol. 44(1), pages 341-358, June.
    • Handle: RePEc:spr:decfin:v:44:y:2021:i:1:d:10.1007_s10203-021-00321-2
    DOI: 10.1007/s10203-021-00321-2
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    References listed on IDEAS

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    1. Matsumoto, Akio & Szidarovszky, Ferenc, 2020. "Delay growth model augmented with physical and human capitals," Chaos, Solitons & Fractals, Elsevier, vol. 130(C).
    2. Robert M. Solow, 1956. "A Contribution to the Theory of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 70(1), pages 65-94.
    3. T. W. Swan, 1956. "ECONOMIC GROWTH and CAPITAL ACCUMULATION," The Economic Record, The Economic Society of Australia, vol. 32(2), pages 334-361, November.
    4. Kazuo Nishimura & Makoto Yano, 2012. "Non-linear Dynamics and Chaos in Optimal Growth: An Example," Springer Books, in: John Stachurski & Alain Venditti & Makoto Yano (ed.), Nonlinear Dynamics in Equilibrium Models, edition 127, chapter 0, pages 127-150, Springer.
    5. Akio Matsumoto & Ferenc Szidarovszky, 2018. "Dynamic Oligopolies with Time Delays," Springer Books, Springer, number 978-981-13-1786-6, November.
    6. Matsumoto, Akio & Szidarovszky, Ferenc, 2011. "Delay differential neoclassical growth model," Journal of Economic Behavior & Organization, Elsevier, vol. 78(3), pages 272-289, May.
    7. Day, Richard H, 1982. "Irregular Growth Cycles," American Economic Review, American Economic Association, vol. 72(3), pages 406-414, June.
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