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Local and global indeterminacy in two-sector models of endogenous growth

Author

Listed:
  • Paulo Brito

    (ISEG - Technical University of Lisbon, UECE - UECE)

  • Alain Venditti

    (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique)

Abstract

In this paper we consider a two-sector endogenous growth model where the productions of the final good and human capital require economy-wide external effects. Assuming constant returns to scale at the private and social levels, we show that local and global indeterminacy of equilibrium paths are compatible with any values for the elasticity of intertemporal substitution in consumption and any sign for the capital intensity difference across the two sectors.

Suggested Citation

  • Paulo Brito & Alain Venditti, 2009. "Local and global indeterminacy in two-sector models of endogenous growth," Working Papers halshs-00408018, HAL.
    • Handle: RePEc:hal:wpaper:halshs-00408018
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00408018
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    2. Bella, Giovanni & Mattana, Paolo, 2014. "Global indeterminacy of the equilibrium in the Chamley model of endogenous growth in the vicinity of a Bogdanov–Takens bifurcation," Mathematical Social Sciences, Elsevier, vol. 71(C), pages 69-79.
    3. Bella, Giovanni, 2017. "Homoclinic bifurcation and the Belyakov degeneracy in a variant of the Romer model of endogenous growth," Chaos, Solitons & Fractals, Elsevier, vol. 104(C), pages 452-460.
    4. Angelo Antoci & Marcello Galeotti & Paolo Russu, 2014. "Global analysis and indeterminacy in a two-sector growth model with human capital," International Journal of Economic Theory, The International Society for Economic Theory, vol. 10(4), pages 313-338, December.
    5. Daria ONORI & Francesco MAGRIS & Antoine LE RICHE, 2017. "Monetary Rules in a Two-Sector Endogenous Growth Model with Cash-in-Advance Constraint," LEO Working Papers / DR LEO 2504, Orleans Economics Laboratory / Laboratoire d'Economie d'Orleans (LEO), University of Orleans.
    6. Maxime MENUET & Alexandru MINEA & Patrick VILLIEU, 2017. "Public Debt, Endogenous Growth Cycles and Indeterminacy," LEO Working Papers / DR LEO 2467, Orleans Economics Laboratory / Laboratoire d'Economie d'Orleans (LEO), University of Orleans.
    7. Nishimura Kazuo & Shigoka Tadashi, 2019. "Hopf bifurcation and the existence and stability of closed orbits in three-sector models of optimal endogenous growth," Studies in Nonlinear Dynamics & Econometrics, De Gruyter, vol. 23(4), pages 1-21, September.
    8. Antoine Riche & Francesco Magris & Daria Onori, 2020. "Monetary rules in a two-sector endogenous growth model," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 69(4), pages 1049-1100, June.
    9. Fu, Wentao & Le Riche, Antoine, 2021. "Endogenous growth model with Bayesian learning and technology selection," Mathematical Social Sciences, Elsevier, vol. 114(C), pages 58-71.
    10. Bella, Giovanni & Mattana, Paolo & Venturi, Beatrice, 2017. "Shilnikov chaos in the Lucas model of endogenous growth," Journal of Economic Theory, Elsevier, vol. 172(C), pages 451-477.
    11. Maxime Menuet & Alexandru Minea & Patrick Villieu, 2019. "Increasing Returns, Balanced-Budget Rules, and Aggregate Fluctuations," Post-Print hal-02315041, HAL.
    12. Henry, Nastasia & Venditti, Alain, 2024. "On the (de)stabilization role of protectionism," Journal of Mathematical Economics, Elsevier, vol. 113(C).
    13. Nastasia Henry & Alain Venditti, 2023. "On the (de)stabilization role of protectionism: Theory and evidence," Working Papers hal-04311555, HAL.
    14. Antoci, Angelo & Borghesi, Simone & Galeotti, Marcello & Russu, Paolo, 2022. "Maladaptation to environmental degradation and the interplay between negative and positive externalities," European Economic Review, Elsevier, vol. 143(C).
    15. Yoichiro Tamanyu, 2020. "The Role of Nonlinearity in Indeterminate Models: An Application to Expectations-Driven Liquidity Traps," Keio-IES Discussion Paper Series 2020-023, Institute for Economics Studies, Keio University.
    16. José Gaspar & Liliana Garrido-da-Silva & Paulo B. Vasconcelos & Óscar Afonso, 2023. "Local and global indeterminacy and transition dynamics in a growth model with public goods," Portuguese Economic Journal, Springer;Instituto Superior de Economia e Gestao, vol. 22(2), pages 271-314, May.
    17. Maxime Menuet & Alexandru Minea & Patrick Villieu, 2019. "Endogenous fluctuations and the balanced-budget rule: taxes versus spending-based adjustment," Post-Print halshs-02315727, HAL.
    18. Augeraud-Veron, Emmanuelle & Boucekkine, Raouf & Gozzi, Fausto & Venditti, Alain & Zou, Benteng, 2024. "Fifty years of mathematical growth theory: Classical topics and new trends," Journal of Mathematical Economics, Elsevier, vol. 111(C).
    19. Carboni, Oliviero A. & Russu, Paolo, 2013. "Linear production function, externalities and indeterminacy in a capital-resource growth model," Journal of Mathematical Economics, Elsevier, vol. 49(5), pages 422-428.

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