Productive Consumption in a Two-Sector Model of Economic Development

Ichiroh Daitoh and Kazuo Nishimura

Chapter Chapter 7 in Creative Complex Systems, 2021, pp 101-111 from Springer

Abstract: Abstract In low-income countries, labor productivity crucially depends on per capita consumption that contributes to good nutrition, health, and education. A higher level of per capita consumption improves each worker’s labor productivity. This concept of productive consumption was first formulated in the aggregate growth model by Steger (J Econ Dyn Control (2002) 26:1053–1068) and analyzed using numerical simulations. In this chapter, we investigate the stabilityStability of the labor-efficiency model of productive consumption by extending Steger’s model to a two-sector modelTwo-sector model. We find that a steady state uniquely exists and is saddle-point stable, providing theoretical support for Steger’s simulation results.

Keywords: Developing country; Aggregate economic growth; Productive consumption externality; Stability; Two-sector model; O1; O4; E1 (search for similar items in EconPapers)
Date: 2021
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:crechp:978-981-16-4457-3_7

Ordering information: This item can be ordered from
http://www.springer.com/9789811644573

DOI: 10.1007/978-981-16-4457-3_7

Access Statistics for this chapter

More chapters in Creative Economy from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().