Global analysis and indeterminacy in a two-sector growth model with human capital
AbstractThe purpose of the present paper is to highlight some features of global dynamics of the two-sector growth model with accumulation of human and physical capital analyzed by Brito, P. and Venditti, A. (2010). In particular, we explore two cases where the Brito-Venditti system admits two balanced growth paths each of them corresponding, after a change of variables, to an equilibrium point of a 3-dimensional system. In the former one, the two stationary states have, respectively, a 2-dimensional and a 1-dimensional stable manifold (i.e. they are, in the Brito-Venditti terminology, locally indeterminate of order 2 and determinate, respectively). In the latter case, instead, the stable manifolds of the two equilibria have, respectively, dimension two and three (i.e. they are locally indeterminate of order 2 and 3). In both cases we prove the possible existence of points P such that in any neighborhood of P lying on the plane corresponding to a fixed value of the state variable there exist points Q whose positive trajectories tend to either equilibrium point. Moreover we show examples where the 2-dimensional stable manifold of the order 2 locally indeterminate equilibrium, in the former case, and the basin of the attracting equilibrium, in the latter case, are proven to be both unbounded.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 39079.
Date of creation: May 2012
Date of revision:
global and local indeterminacy; two-sector model; endogenous growth; poverty trap; global analysis;
Other versions of this item:
- Angelo Antoci & Marcello Galeotti & Paolo Russu, 2012. "Global Analysis and Indeterminacy in a Two-sector Growth Model with Human Capital," Working Papers - Economics wp2012_14.rdf, Universita' degli Studi di Firenze, Dipartimento di Scienze per l'Economia e l'Impresa.
- O41 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
- O10 - Economic Development, Technological Change, and Growth - - Economic Development - - - General
- E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution
- C02 - Mathematical and Quantitative Methods - - General - - - Mathematical Economics
- D90 - Microeconomics - - Intertemporal Choice - - - General
- C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
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