Exact parametric restrictions for 3-cycles in the RSS model: A complete and comprehensive characterization

Liuchun Deng, M. Khan and Tapan Mitra

Journal of Mathematical Economics, 2020, vol. 90, issue C, 48-56

Abstract: This paper presents necessary and sufficient conditions for 3-period cycles in the two-sector Robinson–Solow–Srinivasan (RSS) model, taking as its point of departure an independently-(and simultaneously-) discovered exact discount-factor restriction for a general class of growth models by Mitra and Nishimura–Yano (MNY) in 1996. Our investigation of this remarkable result in the specificity of the RSS model enables a broadened inquiry that goes beyond the discount factor to parameters of labor-productivity and capital-depreciation. Since the RSS model, despite its concrete simplicity, is not covered by the general MNY model, the exact discount-factor restriction presented here does not follow from the MNY theorem, and necessitates new argumentation. Furthermore, we present a novel exact parametric region as our second result.

Keywords: Two-sector model; Optimal policy function; 3-period cycles; Exact parametric restrictions (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:mateco:v:90:y:2020:i:c:p:48-56

DOI: 10.1016/j.jmateco.2020.05.008

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