Endogenous Growth and Poverty Traps in a Cournotian Model

Jordi Galí and Fabrizio Zilibotti

Annals of Economics and Statistics, 1995, issue 37-38, 197-213

Abstract: We analyze the implications for the dynamics of capital accumulation of market power and endogenous demand elasticities, in an environment in which the latter are affected by the number of competitors in each industry. In equilibrium the interest rate increases as capital accumulates, even though the marginal product of capital is constant. Under standard assumptions two steady states and a balanced growth path exist, and the possibility of multiple equilibrium paths (for given initial conditions) arises. The latter feature is argued to match several empirical observations.

Date: 1995
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Citations: View citations in EconPapers (4)

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Working Paper: Endogenous Growth and Poverty Traps in a Cournotian Model (1994)
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Persistent link: https://EconPapers.repec.org/RePEc:adr:anecst:y:1995:i:37-38:p:197-213

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