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- Title
On Intersectoral allocations, factors substitutability and multiple long-run growth paths.
- Authors
Drugeon, Jean-Pierre; Poulsen, Odile; Venditti, Alain
- Abstract
This article considers a two-sector model of economic growth with "labour-augmenting" intersectoral external effects stemming from the aggregate capital stock. It is shown that equilibrium balanced growth paths with a non-trivial labour allocation scheme become available. A set of sufficient conditions for the existence of multiple equilibrium growth rays is provided and their determinacy properties are then characterised. Finally, examination of a parameterised C.E.S. economy illustrates the central role of non-unitary values for the elasticity of substitution in the multiplicity issue.
- Subjects
ECONOMETRIC models; LABOR; ECONOMIC development; CAPITAL stock; ECONOMIC equilibrium; ECONOMICS; ELASTICITY (Economics)
- Publication
Economic Theory, 2003, Vol 21, Issue 1, p175
- ISSN
0938-2259
- Publication type
Article
- DOI
10.1007/s00199-001-0240-0