Imbalance effects in the Lucas model: an analytical exploration
In this note, we use a technique analogous to Xie's method (1994) to solve analytically the Lucas model with externality in a specific parametric case. In particular, we characterize the shape of imbalance effects in this model. Our results are entirely consistent with the findings of the related computational literature. Moreover, our analytical investigation tends to show that these findings are robust to the presence of the Lucas externality as long as a unique equilibrium path exists.
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- Xie Danyang, 1994.
"Divergence in Economic Performance: Transitional Dynamics with Multiple Equilibria,"
Journal of Economic Theory,
Elsevier, vol. 63(1), pages 97-112, June.
- Danyang Xie, 2002. "Divergence in Economic Performance: Transitional Dynamics with Multiple Equilibria," GE, Growth, Math methods 0210002, EconWPA.
- Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
- Mulligan, C.B. & Sala-i-Martin, X., 1992.
"Transitional Dynamics in Two-Sector Models of Endogenous Growth,"
651, Yale - Economic Growth Center.
- 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.
- Casey B. Mulligan & Xavier Sala-i-Martin, 1992. "Transitional Dynamics in Two-Sector Models of Endogenous Growth," NBER Working Papers 3986, National Bureau of Economic Research, Inc.
- 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.
- 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.
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