Mino, Kazuo (2000): Sector-Specific Externalities and Endogenous Growth under Social Constant Returns.
Download (278kB) | Preview
By examining two-sector models of endogenous growth with physical and human capital, this paper demonstrates that indeterminacy of equilibrium may emerge even in the absence of social increasing returns. The first model we examine assumes that both final good and new human capital production sectors employ physical as well as human capital under social constant returns but private decreasing returns due to the presence of sector-specific externalities. It is shown that a small divergence between private and social factor intensity conditions generates indeterminacy of equilibrium rather easily even under constant returns. I addition, we show that introducing endogenous labor supply may enhance the possibility of indeterminacy. Some extensions and intuitive interpretation of the indeterminacy conditions are also presented.
|Item Type:||MPRA Paper|
|Original Title:||Sector-Specific Externalities and Endogenous Growth under Social Constant Returns|
|Keywords:||social constant returns, indeterminacy of equilibrium, endogenous growth|
|Subjects:||O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O41 - One, Two, and Multisector Growth Models
E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy > E23 - Production
E - Macroeconomics and Monetary Economics > E1 - General Aggregative Models > E13 - Neoclassical
|Depositing User:||Kazuo Mino|
|Date Deposited:||29. Aug 2009 13:44|
|Last Modified:||11. Mar 2015 07:37|
Becker, G.S., (1975), Human Capital, The University of Chicago Press.
Benhabib, J. and Farmer, R.E. (1994), ”Intermediacy and Growth”, Journal of Economic Theory 63, 19-41.
Benhabib, J. and Farmer, R.E. (1996), ”Indeterminacy and Sector Specific Externalities”, Journal of Monetary Economics 37, 397-419.
Benhabib, J. and Farmer, R.E. (1997), ”Indeterminacy and Sunspots in Macroeconomics”, forthcoing in Handbook of Macroeconomics edited by J.B.Taylor and M.Woodford, North-Holland.
Benhabib, J. and Nishimura, K. (1996), ”Indeterminacy and Sunspots with Constant Returns”, C.V.Starr Center Research Report No.9644, Department of Economics, New York University.
Benhabib, J. and Nishimura, K. (1998),”Indeterminacy in aMulti-Sector Model under Social Constant Returns”, Journal of Economic Theory.
Benhabib, J. and Perli, R. (1994), ”Uniqueness and Indeterminacy: Transitional Dynamics”, Journal of Economic Theory 63, 113-142.
Boldrin, M. and Rustichini, A. (1994), ”Indeterminacy of Equilibria in Models with Infinitely-lived Agents and External Effects”, Econometrica 62, 323-342.
Bond, E.,Wang, P. and Yip, C.K. (1996), ”A General Two-SectorModel of Endogenous Growth with Physical and Human Capital”, Journal of Economic Theory
Farmer, R.E. and Guo, J.T. (1994), ”Real Business Cycles and Animal Spirit Hypothesis”, Journal of Economic Theory 63, 42-72.
Guo, J.T. and Lansing, K.J. (1998), ”Indeterminacy and Stabilization Policy”, Journal of Economic Theory 82,481-490.
King, R.G., Plosser, C.I. and Rebelo, S.T. (1988), ”Production, Growth, abd Business Cycles II”,Journal of Monetary Economics 26.
Ladròn-de-Guevara, A., Ortigueria, S. and Santos, M. S. (1997), ”Equilibrium Dynamics in Two Sector Models of Endogenous Growth”, Journal of Economic Dynamics and Control 21, 115-143.
Lucas, R.E., (1988), ”On the Mechanics of Development”, Journal of Monetary Economics 22, 3-42.
de Hek, P.A. (1998), ”An Aggregative Model of Capital Accumulation with Leisure-Dependent Utility”, Journal of Economic Dynamics and Control 23, 255-276.
Milesi-Ferretti, G.M. and Roubini, N. (1998a), ”Growth Effects of Income and Consumption Taxes”, Journal of Money, Creditm and Banking 30, 721-744.
Milesi-Ferretti, G.M. and Roubini, N. (1998b), ”On Taxation of Human Capitql in Models of Endogenous Growth”, Journal of Public Economics 70, 237-254.
Mino, K. (1996a), ”Analysis of a Two-Sector Model of Endogenous Growth with Capital Income Taxation”, International Economic Review 37, 227-251
Mino, K. (1998), ”Indeterminacy in Convex Models of Endogenous Growth’, Discussion Paper No.9715, Faculty of Economics, Kobe University.
Mino, K. (1998), ”Non Separable Utility Functions and Indeterminacy of Equilibrium in a Model with Human Capital”, Discussion Paper No.9808, Faculty of Economics, Kobe University, forthcoming in Economics Letters.
Mitra, T. (1998), ”On Equilibrium Dynamics under Externalities in a Model of Economic Development”, Japanese Economic Review.
Mulligan, C. and Sala-i-Martin, X. (1993), ”Transitional Dynamics in Two-Sector Models of Endogenous Growth”, Quarterly Journal of Economics 103, 739-773.
Ortigueira, S. (1998), ”A Dynamic Model of an Endogenous Growth Model with Leisure”, (mimeo).
Pelloni, A. and Waldmann, R. (1998), ”Stability Properties of a Growth Model”, Economics Letters 61, 55-60.
Perli, R. and Sakellaris, P. (1998), ”Human Capital Formation and Business Cycles Persistence”, Journal of Monetary Economics 42, 67-92.
Xie, D. (1994), ”Divergence in Economic Performance: Transitional Dynamics with Multiple Equilibria”, Journal of Economic Theory 63, 97-112.