On Intersectoral allocations, factors substitutability and multiple long-run growth paths

Jean-Pierre Drugeon, Odile Poulsen and Alain Venditti

Economic Theory, 2003, vol. 21, issue 1, 175-183

Abstract: This article considers a two-sector model of economic growth with “labour-augmenting” intersectoral external effects stemming from the aggregate capital stock. It is shown that equilibrium balanced growth paths with a non-trivial labour allocation scheme become available. A set of sufficient conditions for the existence of multiple equilibrium growth rays is provided and their determinacy properties are then characterised. Finally, examination of a parameterised C.E.S. economy illustrates the central role of non-unitary values for the elasticity of substitution in the multiplicity issue. Copyright Springer-Verlag Berlin Heidelberg 2003

Keywords: Keywords and Phrases: Intersectoral labour-augmenting externalities; Long-run multisector growth; Global indeterminacies.; JEL Classification Numbers: E32; O41. (search for similar items in EconPapers)
Date: 2003
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Citations: View citations in EconPapers (20)

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Persistent link: https://EconPapers.repec.org/RePEc:spr:joecth:v:21:y:2003:i:1:p:175-183

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DOI: 10.1007/s00199-001-0240-0

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