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Transitional Dynamics and Indeterminacy of Equilibria is an Endogenous Growth Model with a Public Input

Author

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  • Theodore Palivos
  • Chong K. Yip
  • Junxi Zhang

Abstract

The authors analyze an endogenous growth model with economy-wide increasing returns, in which a public input is essential for private production. Within such a framework, it is shown that a continuum of equilibria and global indeterminacy can arise for reasonable parameter values, simply due to the presence of endogenous public policy. This can potentially account for "leapfrogging" or retroceding growth experiences. It is demonstrated how fiscal policy can serve as a selection device among different convergent paths. Copyright Blackwell Publishing Ltd 2003
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Theodore Palivos & Chong K. Yip & Junxi Zhang, 2000. "Transitional Dynamics and Indeterminacy of Equilibria is an Endogenous Growth Model with a Public Input," Departmental Working Papers _128, Chinese University of Hong Kong, Department of Economics.
  • Handle: RePEc:chk:cuhked:_128
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    Cited by:

    1. repec:eee:pubeco:v:154:y:2017:i:c:p:137-159 is not listed on IDEAS
    2. Simon Wiederhold, 2009. "Government Spending Composition in a Simple Model of Schumpeterian Growth," Jena Economic Research Papers 2009-101, Friedrich-Schiller-University Jena.
    3. Panagiotis Tsintzos, 2012. "Public Investment Rules and Indeterminacy," Economics Bulletin, AccessEcon, vol. 32(1), pages 7-15.
    4. Hu, Yunfang & Ohdoi, Ryoji & Shimomura, Koji, 2008. "Indeterminacy in a two-sector endogenous growth model with productive government spending," Journal of Macroeconomics, Elsevier, pages 1104-1123.
    5. Pierre-Richard Agénor, 2012. "Infrastructure, Public Education And Growth With Congestion Costs," Bulletin of Economic Research, Wiley Blackwell, vol. 64(4), pages 449-469, October.
    6. Long Xin & Pelloni Alessandra, 2011. "Welfare improving taxation on savings in a growth model," wp.comunite 0091, Department of Communication, University of Teramo.
    7. Long, Xin & Pelloni, Alessandra, 2017. "Factor income taxation in a horizontal innovation model," Journal of Public Economics, Elsevier, pages 137-159.
    8. Maxime Menuet & Alexandru Minea & Patrick Villieu, 2015. "Deficit Rules and Monetization in a Growth Model with Multiplicity and Indeterminacy," Working Papers halshs-01199774, HAL.
    9. repec:eur:ejesjr:178 is not listed on IDEAS
    10. Chen, Shu-Hua & Guo, Jang-Ting, 2014. "Progressive taxation and macroeconomic (in)stability with utility-generating government spending," Journal of Macroeconomics, Elsevier, vol. 42(C), pages 174-183.
    11. Suen, Ming-Hon & Yip, Chong K., 2005. "Superneutrality, indeterminacy and endogenous growth," Journal of Macroeconomics, Elsevier, vol. 27(4), pages 579-595, December.
    12. Jang-Ting Guo & Shu-Hua Chen, 2015. "Progressive Taxation as an Automatic Destabilizer under Endogenous Growth," Working Papers 201510, University of California at Riverside, Department of Economics.
    13. Been-Lon Chen & Angus Chu, 2010. "On R&D spillovers, multiple equilibria and indeterminacy," Journal of Economics, Springer, vol. 100(3), pages 247-263, July.
    14. Simon Wiederhold, 2012. "The Role of Public Procurement in Innovation: Theory and Empirical Evidence," ifo Beiträge zur Wirtschaftsforschung, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 43.
    15. repec:eur:ejesjr:64 is not listed on IDEAS
    16. Jang-Ting Guo & Shu-Hua Chen, 2016. "On Indeterminacy and Growth under Progressive Taxation and Utility-Generating Government Spending," Working Papers 201604, University of California at Riverside, Department of Economics.
    17. Takeo Hori & Noritaka Maebayashi, 2013. "Indeterminacy and utility-generating government spending under balanced-budget fiscal policies," Discussion Papers in Economics and Business 13-13, Osaka University, Graduate School of Economics and Osaka School of International Public Policy (OSIPP).

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