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On the existence and uniqueness of solution to the Lucas–Uzawa model

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  • Chilarescu, Constantin

Abstract

In this paper we define the concept of admissible solution and then provide closed-form solutions for all variables of the model along the transitional dynamics path. We present numerical simulations and compare our results with those obtained through the methods developed by Boucekkine and Ruiz-Tamarit and, Barro and Sala-I-Martin.

Suggested Citation

  • Chilarescu, Constantin, 2011. "On the existence and uniqueness of solution to the Lucas–Uzawa model," Economic Modelling, Elsevier, vol. 28(1), pages 109-117.
  • Handle: RePEc:eee:ecmode:v:28:y:2011:i:1:p:109-117
    DOI: 10.1016/j.econmod.2010.09.019
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    References listed on IDEAS

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    1. Benhabib Jess & Perli Roberto, 1994. "Uniqueness and Indeterminacy: On the Dynamics of Endogenous Growth," Journal of Economic Theory, Elsevier, vol. 63(1), pages 113-142, June.
    2. Boucekkine, R. & Ruiz-Tamarit, J.R., 2008. "Special functions for the study of economic dynamics: The case of the Lucas-Uzawa model," Journal of Mathematical Economics, Elsevier, vol. 44(1), pages 33-54, January.
    3. Casey B. Mulligan & Xavier Sala-i-Martin, 1993. "Transitional Dynamics in Two-Sector Models of Endogenous Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 108(3), pages 739-773.
    4. Xie Danyang, 1994. "Divergence in Economic Performance: Transitional Dynamics with Multiple Equilibria," Journal of Economic Theory, Elsevier, vol. 63(1), pages 97-112, June.
    5. Hiraguchi, Ryoji, 2009. "A solution to the Lucas-Uzawa model with increasing returns to scale: Note," Economic Modelling, Elsevier, vol. 26(5), pages 831-834, September.
    6. 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 1042-1067, December.
    7. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
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    Citations

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    Cited by:

    1. Constantin Chilarescu, 2018. "The effect of externality on the transitional dynamics: the case of Lucas model," Economics Bulletin, AccessEcon, vol. 32767(3).
    2. Constantin Chilarescu, 2019. "Closed form solutions of Lucas Uzawa model with externalities via partial Hamiltonian approach. Some Clarifications," Papers 1907.12623, arXiv.org.
    3. C. Chilarescu & I. Viasu, 2019. "Uniqueness and Multiple Trajectories for the Case of Lucas Model," Computational Economics, Springer;Society for Computational Economics, vol. 54(3), pages 1157-1177, October.
    4. Constantin Chilarescu & Ioana Viasu, 2016. "A Closed-form Solution of a Two-sector Endogenous Growth Model with Habit Formation," Australian Economic Papers, Wiley Blackwell, vol. 55(2), pages 112-127, June.
    5. Rehana Naz, 2017. "Closed-form Solutions for the Lucas-Uzawa model: Unique or Multiple," Papers 1712.08654, arXiv.org.
    6. Dirk Bethmann, 2013. "Solving Macroeconomic Models with Homogeneous Technology and Logarithmic Preferences," Australian Economic Papers, Wiley Blackwell, vol. 52(1), pages 1-18, March.
    7. Constantin Chilarescu & Ciprian Sipos, 2014. "Solving Macroeconomic Models with Homogenous Technology and Logarithmic Preferences - A Note," Economics Bulletin, AccessEcon, vol. 34(1), pages 541-550.
    8. Chaudhry, Azam & Tanveer, Hafsa & Naz, R., 2017. "Unique and multiple equilibria in a macroeconomic model with environmental quality: An analysis of local stability," Economic Modelling, Elsevier, vol. 63(C), pages 206-214.
    9. Constantin Chilarescu, 2019. "On the Solutions of the Lucas-Uzawa Model," Papers 1907.12658, arXiv.org.
    10. Iulia PARA & Ioana VIASU, 2018. "On the Solutions to the Ramsey Model with Logistic Population Growth via the Partial Hamiltonian Approach," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(2), pages 142-150, December.
    11. Kazuyuki Sasakura, 2020. "The Education Sector and Economic Growth: A First Study of the Uzawa Model," Working Papers 2013, Waseda University, Faculty of Political Science and Economics.

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    More about this item

    Keywords

    Endogenous growth model; Hamiltonian function; Uniqueness of solution;
    All these keywords.

    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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