Factor Intensity Reversal and Ergodic Chaos

Aditya Goenka and Odile Poulsen

No 04-13, Working Papers from University of Aarhus, Aarhus School of Business, Department of Economics

Abstract: This paper studies a two-sector endogenous growth model with

labour augmenting externalities or Harrod-Neutral technical change. The

technologies are general and the preferences are of the CES class. If con-

sumers are su±ciently patient, ergodic chaos and geometric sensitivity to

initial conditions can emerge if either (1) there is factor intensity reversal;

or (2) if the consumption goods producing sector is always capital intensive.

The upper bound on the discount rate is determined only by the transver-

sality condition. If utility is linear, there can be chaos only if there is factor

intensity reversal

Keywords: Ergodic Chaos; Two-sector endogenous growth model; Factor intensity reversal; Labor-augmenting externalities (search for similar items in EconPapers)
JEL-codes: C61 D90 O41 (search for similar items in EconPapers)
Pages: 29 pages
Date: 2004-12-10
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:hhs:aareco:2004_013

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