Dynamic Growth Games with Externalities
AbstractWe examine the dynamics growth in a simple economy with two industrial sectors that exert externalities on each other. We find a solution to the dynamic game that ensues between the two sectors and compare it to the efficient cooperative solution. We show that internalize the externality. The direction of the inefficiency depends on the sign of the externality. We also examine the growth rates of the two sectors in this economy, focussing on the production functions. Unless the interaction parameters are identical, one of the sectors will eventually dominate the economy. We also show that as the number of sectors grows, the solution approaches the standard case where the sectors do not internalize the externality at all and this model represents a case intermediate between the usual cases of total and no internalization.
Download InfoTo our knowledge, this item is not available for download. To find whether it is available, there are three options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
Bibliographic InfoPaper provided by Centro de Economía Aplicada, Universidad de Chile in its series Documentos de Trabajo with number 2.
Date of creation: 1996
Date of revision:
You can help add them by filling out this form.
reading list or among the top items on IDEAS.Access and download statisticsgeneral information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.