More on the dynamics in the endogenous growth model with human capital

Jaime Alonso-Carrera ()

Investigaciones Economicas, 2001, vol. 25, issue 3, pages 561-583

Abstract: This paper shows that multiple and globally indeterminate long-run growth rates can easily arise in the two-sector growth model introduced by Lucas (1988). This result is generated by the existence of diminishing returns to time at the private level in human capital accumulation and the existence of external effects from human capital stock in production. The paper asserts that two interior balanced growth paths arise under a sufficiently large elasticity of intertemporal substitution. One is locally determinate, whereas the other can be locally indeterminate. Furthermore, we show that these balanced growth paths can also be globally indeterminate. (Copyright: Fundación Empresa Pública)

Keywords: endogenous growth; human capital; externalities; multiple equilibria; indeterminacy (search for similar items in EconPapers)
JEL-codes: D62 J24 E3 O41 (search for similar items in EconPapers)
Date: 2001
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