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Homothetic Multisector Growth Models

Author

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  • Bjarne S. Jensen
  • Ulla Lehmijoki

Abstract

Multi-sector growth (MSG) models have a special aura which is shared with Computable general equilibrium (CGE) models. Both of them, with their many sectors (industries, goods), are known as trying to convert Walrasian general equilibrium systems from an abstract economy representation into workable models with industrial structures changing as actually observed. Yet they are plagued by severe problems. First, they are difficult subjects involving systems of nonlinear equations. Second, their prevalent numerical (algorithmic) methodology offers little in the way of showing a clear overall picture and understanding the plethora of numbers pouring out from model simulations. The great wood is not seen for all the trees. Hence the main objective is to set out comparative-static and dynamic systems for succinctly stating and explicitly solving multisector growth models. The Walrasian general equilibrium is completely stated by one equation and the multisector dynamics by one differential equation. Benchmark solutions are shown for three CES parameter regimes of a ten-sector general equilibrium model.

Suggested Citation

  • Bjarne S. Jensen & Ulla Lehmijoki, 2011. "Homothetic Multisector Growth Models," DEGIT Conference Papers c016_001, DEGIT, Dynamics, Economic Growth, and International Trade.
    • Handle: RePEc:deg:conpap:c016_001
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    File URL: http://degit.sam.sdu.dk/papers/degit_16/c016_001.pdf
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    References listed on IDEAS

    as
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    3. Wei-Bin Zhang, 2019. "Endogenous Population In A Neoclassical Growth Model With Wealth And Time Values," Noble International Journal of Economics and Financial Research, Noble Academic Publsiher, vol. 4(5), pages 47-63, May.
    4. Wei-Bin Zhang, 2018. "Business Cycles In A General Equilibrium Dynamic Model With Land Value And Rent," Economic Annals, Faculty of Economics and Business, University of Belgrade, vol. 63(216), pages 7-34, January –.
    5. Jensen, Bjarne S. & Pedersen, Peder J. & Guest, Ross, 2022. "Demographic Changes, Labor Supplies, Labor Complementarities, Calendar Annual Wages of Age Groups, and Cohort Life Wage Incomes," IZA Discussion Papers 15127, Institute of Labor Economics (IZA).
    6. repec:beo:journl:v:62:y:2018:i:216:p:7-34 is not listed on IDEAS
    7. Zhang W.B., 2015. "Birth And Mortality Rates, Gender Division Of Labor, And Time Distribution In The Solow Growth Model," Revista Galega de Economía, University of Santiago de Compostela. Faculty of Economics and Business., vol. 24(1), pages 121-134.

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