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Local and global indeterminacy in two-sector models of endogenous growth

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Author Info

  • Paulo Brito

    (ISEG - Technical University of Lisbon, UECE - UECE)

  • Alain Venditti

    () (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - Université de la Méditerranée - Aix-Marseille II - Université Paul Cézanne - Aix-Marseille III - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - CNRS : UMR6579)

Abstract

In this paper we consider a two-sector endogenous growth model where the productions of the final good and human capital require economy-wide external effects. Assuming constant returns to scale at the private and social levels, we show that local and global indeterminacy of equilibrium paths are compatible with any values for the elasticity of intertemporal substitution in consumption and any sign for the capital intensity difference across the two sectors.

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Bibliographic Info

Paper provided by HAL in its series Working Papers with number halshs-00408018.

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Date of creation: 28 Jul 2009
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Handle: RePEc:hal:wpaper:halshs-00408018

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Related research

Keywords: Two-sector model; endogenous growth; economy-wide externalities; local and global indeterminacy;

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References

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  1. Romer, Paul M, 1986. "Increasing Returns and Long-run Growth," Journal of Political Economy, University of Chicago Press, vol. 94(5), pages 1002-37, October.
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  8. 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.
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  11. Azariadis, Costas & Stachurski, John, 2005. "Poverty Traps," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 5 Elsevier.
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  19. repec:hal:journl:hal-00182205 is not listed on IDEAS
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  21. Caballe, Jordi & Santos, Manuel S, 1993. "On Endogenous Growth with Physical and Human Capital," Journal of Political Economy, University of Chicago Press, vol. 101(6), pages 1042-67, December.
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  23. Nishimura, Kazuo & Venditti, Alain, 2004. "Indeterminacy And The Role Of Factor Substitutability," Macroeconomic Dynamics, Cambridge University Press, vol. 8(04), pages 436-465, September.
  24. Jean-Pierre Drugeon & Odile Poulsen & Alain Venditti, 2003. "On Intersectoral allocations, factors substitutability and multiple long-run growth paths," Economic Theory, Springer, vol. 21(1), pages 175-183, 01.
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Cited by:
  1. Angelo Antoci & Marcello Galeotti & Paolo Russu, 2012. "Global Analysis and Indeterminacy in a Two-sector Growth Model with Human Capital," Working Papers Series wp2012_14.rdf, Universita' degli Studi di Firenze, Dipartimento di Scienze dell'Economia e Dell'Impresa.

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