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

Paulo Brito (1, 2) , Alain Venditti (3)

1 ISEG
2 UECE
3 GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille

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.

Mots clés: Two-sector model; endogenous growth; economy-wide externalities; local and global indeterminacy

Domaines: Economies et finances

Paulo Brito, Alain Venditti. Local and global indeterminacy in two-sector models of endogenous growth. 2009. ⟨halshs-00408018⟩