✦ LIBER ✦
Equilibrium dynamics in the one-sector endogenous growth model with physical and human capital
✍ Scribed by Manuel A. Gómez
- Publisher
- Elsevier Science
- Year
- 2003
- Tongue
- English
- Weight
- 421 KB
- Volume
- 28
- Category
- Article
- ISSN
- 0165-1889
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✦ Synopsis
This paper concerns the transitional dynamics of the one sector endogenous growth model with physical and human capital when gross investments are irreversible. It has been claimed that the transition path is on the stable saddle path of the system that describes the dynamics of the economy as long as the constraint on nonnegative gross investment in one of the factors is binding. We show that this does not have to be the case. The dynamics can be determined by noting that the continuity of the shadow prices involves the continuity of the consumption path.