Indeterminacy and Labour Augmenting Externalities

Poulsen, Odile and Goenka, Aditya (2005) Indeterminacy and Labour Augmenting Externalities. In: Growth, Trade and Economic Institutions. Journal of Economics Zeitschrift für Nationalökonomie Supplementum . Springer, pp. 143-166.

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Abstract

We study a two-sector model of economic growth with labor augmenting external effects. Using general specifications of the technologies, we derive necessary and sufficient conditions for local indeterminacy. We show that, when the investment good sector is capital intensive at the private level, the necessary condition for the growth ray to be indeterminate is that the cost of forgoing consumption is not too high. When the consumption good sector is capital intensive, indeterminacy requires that the depreciation of the capital stock is not too low and that utility is not too concave.

Item Type:	Book Section
Faculty \ School:	Faculty of Social Sciences Faculty of Social Sciences > School of Economics
Depositing User:	Vishal Gautam
Date Deposited:	01 Jan 0012
Last Modified:	14 Jul 2022 09:31
URI:	https://ueaeprints.uea.ac.uk/id/eprint/16522
DOI:	10.1007/3-211-26650-X_6

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