Equilibrium dynamics in two-sector models of endogenous growth

Antonio Ladrón-De-Guevara, Salvador Ortigueira, Manuel Santos

Research output: Contribution to journalArticle

65 Citations (Scopus)

Abstract

This paper considers two extensions of the Uzawa-Lucas framework. In our first extension, physical capital is included as an input of the educational sector. In our second extension, leisure considerations are assumed to play a positive role in agents' welfare. The case with physical capital in the production of education features (under standard conditions) a unique steady state, and thus the dynamics are qualitatively similar to those of the original Uzawa-Lucas framework. In our second model with leisure there could be a multiplicity of steady states with different rates of growth. What determines here the chosen rate of growth is the initial relative amount of physical and human capital. Our results therefore illustrate that in a world without externalities there could coexist different long-term growth rates.

Original languageEnglish (US)
Pages (from-to)115-143
Number of pages29
JournalJournal of Economic Dynamics and Control
Volume21
Issue number1
StatePublished - Jan 1997
Externally publishedYes

Fingerprint

Endogenous Growth
Sector
Human Capital
Externalities
Education
Welfare
Multiplicity
Model
Two-sector model
Dynamic equilibrium
Endogenous growth
Physical capital
Framework
Leisure

Keywords

  • Balanced path
  • Endogenous growth
  • Stability

ASJC Scopus subject areas

  • Economics and Econometrics
  • Control and Optimization

Cite this

Equilibrium dynamics in two-sector models of endogenous growth. / Ladrón-De-Guevara, Antonio; Ortigueira, Salvador; Santos, Manuel.

In: Journal of Economic Dynamics and Control, Vol. 21, No. 1, 01.1997, p. 115-143.

Research output: Contribution to journalArticle

@article{56c6b1636a9c492d8625a376908cdd97,
title = "Equilibrium dynamics in two-sector models of endogenous growth",
abstract = "This paper considers two extensions of the Uzawa-Lucas framework. In our first extension, physical capital is included as an input of the educational sector. In our second extension, leisure considerations are assumed to play a positive role in agents' welfare. The case with physical capital in the production of education features (under standard conditions) a unique steady state, and thus the dynamics are qualitatively similar to those of the original Uzawa-Lucas framework. In our second model with leisure there could be a multiplicity of steady states with different rates of growth. What determines here the chosen rate of growth is the initial relative amount of physical and human capital. Our results therefore illustrate that in a world without externalities there could coexist different long-term growth rates.",
keywords = "Balanced path, Endogenous growth, Stability",
author = "Antonio Ladr{\'o}n-De-Guevara and Salvador Ortigueira and Manuel Santos",
year = "1997",
month = "1",
language = "English (US)",
volume = "21",
pages = "115--143",
journal = "Journal of Economic Dynamics and Control",
issn = "0165-1889",
publisher = "Elsevier",
number = "1",

}

TY - JOUR

T1 - Equilibrium dynamics in two-sector models of endogenous growth

AU - Ladrón-De-Guevara, Antonio

AU - Ortigueira, Salvador

AU - Santos, Manuel

PY - 1997/1

Y1 - 1997/1

N2 - This paper considers two extensions of the Uzawa-Lucas framework. In our first extension, physical capital is included as an input of the educational sector. In our second extension, leisure considerations are assumed to play a positive role in agents' welfare. The case with physical capital in the production of education features (under standard conditions) a unique steady state, and thus the dynamics are qualitatively similar to those of the original Uzawa-Lucas framework. In our second model with leisure there could be a multiplicity of steady states with different rates of growth. What determines here the chosen rate of growth is the initial relative amount of physical and human capital. Our results therefore illustrate that in a world without externalities there could coexist different long-term growth rates.

AB - This paper considers two extensions of the Uzawa-Lucas framework. In our first extension, physical capital is included as an input of the educational sector. In our second extension, leisure considerations are assumed to play a positive role in agents' welfare. The case with physical capital in the production of education features (under standard conditions) a unique steady state, and thus the dynamics are qualitatively similar to those of the original Uzawa-Lucas framework. In our second model with leisure there could be a multiplicity of steady states with different rates of growth. What determines here the chosen rate of growth is the initial relative amount of physical and human capital. Our results therefore illustrate that in a world without externalities there could coexist different long-term growth rates.

KW - Balanced path

KW - Endogenous growth

KW - Stability

UR - http://www.scopus.com/inward/record.url?scp=0030641865&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=0030641865&partnerID=8YFLogxK

M3 - Article

AN - SCOPUS:0030641865

VL - 21

SP - 115

EP - 143

JO - Journal of Economic Dynamics and Control

JF - Journal of Economic Dynamics and Control

SN - 0165-1889

IS - 1

ER -