Global analysis and indeterminacy in a two-sector growth model with human capital
Marcello Galeotti and
Paolo Russu ()
MPRA Paper from University Library of Munich, Germany
The purpose of the present paper is to highlight some features of global dynamics of the two-sector growth model with accumulation of human and physical capital analyzed by Brito, P. and Venditti, A. (2010). In particular, we explore two cases where the Brito-Venditti system admits two balanced growth paths each of them corresponding, after a change of variables, to an equilibrium point of a 3-dimensional system. In the former one, the two stationary states have, respectively, a 2-dimensional and a 1-dimensional stable manifold (i.e. they are, in the Brito-Venditti terminology, locally indeterminate of order 2 and determinate, respectively). In the latter case, instead, the stable manifolds of the two equilibria have, respectively, dimension two and three (i.e. they are locally indeterminate of order 2 and 3). In both cases we prove the possible existence of points P such that in any neighborhood of P lying on the plane corresponding to a fixed value of the state variable there exist points Q whose positive trajectories tend to either equilibrium point. Moreover we show examples where the 2-dimensional stable manifold of the order 2 locally indeterminate equilibrium, in the former case, and the basin of the attracting equilibrium, in the latter case, are proven to be both unbounded.
Keywords: global and local indeterminacy; two-sector model; endogenous growth; poverty trap; global analysis (search for similar items in EconPapers)
JEL-codes: O41 O10 E24 C02 D90 C61 (search for similar items in EconPapers)
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Journal Article: Global analysis and indeterminacy in a two-sector growth model with human capital (2014)
Working Paper: Global Analysis and Indeterminacy in a Two-sector Growth Model with Human Capital (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:39079
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