Global externalities, endogenous growth and sunspot fluctuations

Kazuo Nishimura, Harutaka Takahashi, Alain Venditti
Advances in Discrete Dynamical Systems   unpublished
We consider a two-sector economy with Cobb-Douglas technologies, laboraugmenting global external effects and increasing social returns. We prove the existence of a normalized balanced growth path and we give conditions for the occurrence of sunspot fluctuations that are compatible with both types of capital intensity configuration at the private level provided the elasticity of intertemporal substitution in consumption admits intermediary values. We finally show that the existence of period-two
more » ... tence of period-two cycles requires the consumption good to be physical capital intensive at the private level.
doi:10.2969/aspm/05310203 fatcat:fab3jxoijfblrgs5fme7pik7aa