 Growth and multiple equilibria: A unique local dynamicsKei Hosoya Economic Modelling, 2012, vol. 29, issue 5, 1662-1665 Abstract: The paper investigates the local dynamics of a simple growth model with a public health factor. A notable feature of the model is that it employs a non-separable utility function between consumption and the level of public health infrastructure (publicly provided health environment). In addition to the effects on utility, an increase in the public health level contributes to labor productivity growth. From a three-dimensional dynamic system that includes physical capital, public health infrastructure and consumption, our model is found to have multiple equilibria (dual steady states) if the deep parameters of the utility function satisfy certain conditions. Then, numerical computations demonstrate that each equilibrium exhibits local saddle-path stability. This result deserves careful attention, as it indicates that the economy experiences a relatively undiversified growth pattern when converging on high- and low-growth equilibria. Our striking result has important implications in the study of growth and development. Keywords: Growth; Multiple equilibria; Local dynamics; Public health infrastructure (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:29:y:2012:i:5:p:1662-1665 DOI: 10.1016/j.econmod.2012.05.020 Access Statistics for this article Economic Modelling is currently edited by S. Hall and P. Pauly More articles in Economic Modelling from Elsevier |
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