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General Equilibrium Dynamics of Multi-Sector Growth Models

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  • Bjarne S. Jensen
  • Mogens E. Larsen

Abstract

This paper analyzes Walrasian general equilibrium systems and calculates the static and dynamic solutions for competitive market equilibria. The Walrasian framework encompasses the basic multi-sector growth (MSG) models with neoclassical production technologies in N sectors (industries). The endogenous behavior of all the relative prices are analyzed in detail, as are sectorial allocations of the primary factors, labor and capital. Dynamic systems of Walrasian multi-sector economies and the family of solutions (time paths) for steady-state and persistent growth per capita are parametrically characterized. The technology parameters of the capital good industry are decisive for obtaining long-run per capita growth in closed (global) economies. Brief comments are offered on the MSG literature, together with apects on the studies of industrial (structural) evolution and economic history.

Suggested Citation

  • Bjarne S. Jensen & Mogens E. Larsen, 2005. "General Equilibrium Dynamics of Multi-Sector Growth Models," DEGIT Conference Papers c010_003, DEGIT, Dynamics, Economic Growth, and International Trade.
  • Handle: RePEc:deg:conpap:c010_003
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    File URL: http://degit.sam.sdu.dk/papers/degit_10/C010_003.pdf
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    References listed on IDEAS

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    3. Jensen, Bjarne S & Wang, Chunyan, 1999. "Basic Stochastic Dynamic Systems of Growth and Trade," Review of International Economics, Wiley Blackwell, vol. 7(3), pages 378-402, August.
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    6. Somermeyer, W. H. & Langhout, A., 1972. "Shapes of Engel curves and demand curves: Implications of the expenditure allocation model, applied to Dutch data," European Economic Review, Elsevier, vol. 3(3), pages 351-386, November.
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    8. Jensen, Bjarne S, et al, 2001. "Saving Rates, Trade, Technology, and Stochastic Dynamics," Review of Development Economics, Wiley Blackwell, vol. 5(2), pages 182-204, June.
    9. John Laitner, 2000. "Structural Change and Economic Growth," Review of Economic Studies, Oxford University Press, vol. 67(3), pages 545-561.
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    12. Rebelo, Sergio, 1991. "Long-Run Policy Analysis and Long-Run Growth," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 500-521, June.
    13. Uzawa, H, 1969. "Time Preference and the Penrose Effect in a Two-Class Model of Economic Growth," Journal of Political Economy, University of Chicago Press, vol. 77(4), pages 628-652, Part II, .
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    16. Shoven, John B & Whalley, John, 1984. "Applied General-Equilibrium Models of Taxation and International Trade: An Introduction and Survey," Journal of Economic Literature, American Economic Association, vol. 22(3), pages 1007-1051, September.
    17. Tjalling C. Koopmans, 1959. "Stationary Ordinal Utility and Impatience," Cowles Foundation Discussion Papers 81, Cowles Foundation for Research in Economics, Yale University.
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    Citations

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    Cited by:

    1. Bjarne S. Jensen & Ulla Lehmijoki & Elena Rovenskaya, 2015. "Non-Homothetic Multisector Growth Models," Review of Development Economics, Wiley Blackwell, vol. 19(2), pages 221-243, May.
    2. Lifeng Zhang, 2015. "A Multi-sector Model of Public Expenditure and Growth," Journal of Economics, Springer, vol. 115(1), pages 73-93, May.
    3. Wei-Bin Zhang, 2015. "A Portfolio Equilibrium Model of Gold and Capital in an Integrated Walrasian General Equilibrium and Neoclassical Growth Theory," International Journal of Economics and Empirical Research (IJEER), The Economics and Social Development Organization (TESDO), vol. 3(12), pages 616-627, December.
    4. Bjarne S. Jensen & Ulla Lehmijoki, 2011. "Homothetic Multisector Growth Models," DEGIT Conference Papers c016_001, DEGIT, Dynamics, Economic Growth, and International Trade.
    5. Bjarne Jensen & Paul Boer & Jan Daal & Peter Jensen, 2011. "Global restrictions on the parameters of the CDES indirect utility function," Journal of Economics, Springer, vol. 102(3), pages 217-235, April.
    6. repec:beo:journl:v:62:y:2018:i:216:p:7-34 is not listed on IDEAS
    7. Robert Feicht & Wolfgang Stummer, 2010. "Complete Closed-form Solution to a Stochastic Growth Model and Corresponding Speed of Economic Recovery preliminary," DEGIT Conference Papers c015_041, DEGIT, Dynamics, Economic Growth, and International Trade.
    8. Paul de Boer & Bjarne S. Jensen, 2005. "The Expenditure System of CDES Indirect Utility Functions," DEGIT Conference Papers c010_036, DEGIT, Dynamics, Economic Growth, and International Trade.
    9. Alvarez-Cuadrado, Francisco & Long, Ngo Van & Poschke, Markus, 2018. "Capital-labor substitution, structural change and the labor income share," Journal of Economic Dynamics and Control, Elsevier, vol. 87(C), pages 206-231.
    10. Zhang Wei-Bin, 2014. "Land Value and Rent Dynamics in an Integrated Walrasian General Equilibrium and Neoclassical Growth Theory," Scientific Annals of Economics and Business, Sciendo, vol. 61(2), pages 235-258, December.
    11. repec:beo:journl:v:63:y:2018:i:216:p:7-34 is not listed on IDEAS
    12. Wei-Bin Zhang, 2017. "Discrimination and Inequality in an Integrated Walrasian-General-Equilibrium and Neoclassical-Growth Theory," Asian Journal of Economic Modelling, Asian Economic and Social Society, vol. 5(1), pages 57-76, March.
    13. Wei-Bin Zhang, 2014. "A Study of the Role of Government in Income and Wealth Distribution by Integrating the Walrasian General Equilibrium and Neoclassical Growth Theories," Interdisciplinary Description of Complex Systems - scientific journal, Croatian Interdisciplinary Society Provider Homepage: http://indecs.eu, vol. 12(1), pages 28-45.
    14. Zhang, W.-B., 2014. "Ethnic Human Capital Externalities and Inequality in a General Equilibrium Growth Model," Journal of the New Economic Association, New Economic Association, vol. 21(1), pages 33-54.

    More about this item

    Keywords

    pareto effiency; walrasian equilibria; factor accumulation;

    JEL classification:

    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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