Divergence in Economic Performance: Transitional Dynamics with Multiple Equilibria

Danyang Xie

GE, Growth, Math methods from University Library of Munich, Germany

Abstract: Special pairs of the utility functions and the production functions are used in this paper to uncover the transitional dynamics in a Lucas model of growth. The main findings are as follows: A continuum of equilibria exists if the external effect of human capital in goods production is sufficiently large. The process of lagging behind, catching up with, and overtaking that we often observe in the world economy can be explained. Finally, some equilibrium paths are shown to have such complicated patterns that the dynamics conjectured by Lucas are too simple to be correct.

Keywords: Transitional Dynamics; Multiple Equilibria; Lucas Model (search for similar items in EconPapers)
JEL-codes: C61 O41 (search for similar items in EconPapers)
Pages: 20 pages
Date: 2002-10-07
New Economics Papers: this item is included in nep-dev and nep-dge
Note: Type of Document - PDF; prepared on PC; to print on HP; pages: 20; figures: Included
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Related works:
Journal Article: Divergence in Economic Performance: Transitional Dynamics with Multiple Equilibria (1994)
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Persistent link: https://EconPapers.repec.org/RePEc:wpa:wuwpge:0210002

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