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Factor Intensity Reversal and Ergodic Chaos

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Author Info
Goenka, Aditya () (Department of Economics, Aarhus School of Business)
Poulsen, Odile () (Department of Economics, Aarhus School of Business)

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Abstract

This paper studies a two-sector endogenous growth model with

labour augmenting externalities or Harrod-Neutral technical change. The

technologies are general and the preferences are of the CES class. If con-

sumers are su±ciently patient, ergodic chaos and geometric sensitivity to

initial conditions can emerge if either (1) there is factor intensity reversal;

or (2) if the consumption goods producing sector is always capital intensive.

The upper bound on the discount rate is determined only by the transver-

sality condition. If utility is linear, there can be chaos only if there is factor

intensity reversal

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Publisher Info
Paper provided by University of Aarhus, Aarhus School of Business, Department of Economics in its series Working Papers with number 04-13.

Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Length: 29 pages
Date of creation: 10 Dec 2004
Date of revision:
Handle: RePEc:hhs:aareco:2004_013

Contact details of provider:
Postal: The Aarhus School of Business, Prismet, Silkeborgvej 2, DK 8000 Aarhus C, Denmark
Phone: +45 89 486396
Fax: +45 8615 5175
Web page: http://www.asb.dk/departments/nat.aspx
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Related research
Keywords: Ergodic Chaos; Two-sector endogenous growth model; Factor intensity reversal; Labor-augmenting externalities;

Other versions of this item:

Find related papers by JEL classification:
C61 - Mathematical and Quantitative Methods - - Mathematical Methods and Programming - - - Optimization Techniques; Programming Models; Dynamic Analysis
D90 - Microeconomics - - Intertemporal Choice and Growth - - - General
O41 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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References listed on IDEAS
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.:
  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. [Downloadable!] (restricted)
  2. Sorger, Gerhard, 1992. "On the minimum rate of impatience for complicated optimal growth paths," Journal of Economic Theory, Elsevier, vol. 56(1), pages 160-179, February. [Downloadable!] (restricted)
  3. Deneckere, Raymond & Pelikan, Steve, 1986. "Competitive chaos," Journal of Economic Theory, Elsevier, vol. 40(1), pages 13-25, October. [Downloadable!] (restricted)
  4. Boldrin, Michele & Nishimura, Kazuo & Shigoka, Tadashi & Yano, Makoto, 2001. "Chaotic Equilibrium Dynamics in Endogenous Growth Models," Journal of Economic Theory, Elsevier, vol. 96(1-2), pages 97-132, January. [Downloadable!] (restricted)
  5. Goenka, A. & Poulsen, O., 2002. "Indeterminacy and Labor Augmenting Externalities," Working Papers 02-9, University of Aarhus, Aarhus School of Business, Department of Economics.
    Other versions:
  6. Boldrin, Michele & Deneckere, Raymond J., 1990. "Sources of complex dynamics in two-sector growth models," Journal of Economic Dynamics and Control, Elsevier, vol. 14(3-4), pages 627-653, October. [Downloadable!] (restricted)
  7. Boldrin, Michele & Woodford, Michael, 1990. "Equilibrium models displaying endogenous fluctuations and chaos : A survey," Journal of Monetary Economics, Elsevier, vol. 25(2), pages 189-222, March. [Downloadable!] (restricted)
    Other versions:
  8. Grandmont, Jean-Michel, 1985. "On Endogenous Competitive Business Cycles," Econometrica, Econometric Society, vol. 53(5), pages 995-1045, September. [Downloadable!] (restricted)
  9. Goenka, Aditya & Kelly, David L. & Spear, Stephen E., 1998. "Endogenous Strategic Business Cycles," Journal of Economic Theory, Elsevier, vol. 81(1), pages 97-125, July. [Downloadable!] (restricted)
    Other versions:
  10. Baumol, William J & Benhabib, Jess, 1989. "Chaos: Significance, Mechanism, and Economic Applications," Journal of Economic Perspectives, American Economic Association, vol. 3(1), pages 77-105, Winter. [Downloadable!] (restricted)
    Other versions:
  11. 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. [Downloadable!] (restricted)
  12. Drugeon, Jean-Pierre & Venditti, Alain, 2001. "Intersectoral external effects, multiplicities & indeterminacies," Journal of Economic Dynamics and Control, Elsevier, vol. 25(5), pages 765-787, May. [Downloadable!] (restricted)
  13. Day, Richard H. & Pianigiani, Giulio, 1991. "Statistical dynamics and economics," Journal of Economic Behavior & Organization, Elsevier, vol. 16(1-2), pages 37-83, July. [Downloadable!] (restricted)
  14. Majumdar, Mukul & Mitra, Tapan, 1994. "Robust Ergodic Chaos in Discounted Dynamic Optimization Models," Economic Theory, Springer, vol. 4(5), pages 677-88, August.
  15. Mitra, Tapan, 1996. "An Exact Discount Factor Restriction for Period-Three Cycles in Dynamic Optimization Models," Journal of Economic Theory, Elsevier, vol. 69(2), pages 281-305, May. [Downloadable!] (restricted)
  16. Nishimura, Kazuo, 1985. "Competitive equilibrium cycles," Journal of Economic Theory, Elsevier, vol. 35(2), pages 284-306, August. [Downloadable!] (restricted)
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  18. Nishimura, Kazuo & Yano, Makoto, 1996. "On the Least Upper Bound of Discount Factors That Are Compatible with Optimal Period-Three Cycles," Journal of Economic Theory, Elsevier, vol. 69(2), pages 306-333, May. [Downloadable!] (restricted)
  19. Pietro Reichlin, 1997. "Endogenous Cycles in Competitive Models: An Overview," Studies in Nonlinear Dynamics & Econometrics, Berkeley Electronic Press, vol. 1(4), pages 175-185. [Downloadable!] (restricted)
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  21. Michele Boldrin, 1988. "Paths of Optimal Accumulation in Two-Sector Models," UCLA Economics Working Papers 464, UCLA Department of Economics. [Downloadable!]
  22. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July. [Downloadable!] (restricted)
Full references

Cited by:
(explanations, 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.)

  1. Gomes, Orlando, 2007. "Externalities in R&D: a route to endogenous fluctuations," MPRA Paper 2850, University Library of Munich, Germany. [Downloadable!]
  2. Gomes, Orlando, 2007. "A two-dimensional non-equilibrium dynamic model," MPRA Paper 4817, University Library of Munich, Germany. [Downloadable!]
    Other versions:
  3. Gomes, Orlando, 2006. "Too much of a good thing: endogenous business cycles generated by bounded technological progress," MPRA Paper 2845, University Library of Munich, Germany. [Downloadable!]
    Other versions:
  4. Gomes, Orlando, 2007. "Consumer confidence, endogenous growth and endogenous cycles," MPRA Paper 2883, University Library of Munich, Germany. [Downloadable!]
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