On the indeterminacy of capital accumulation paths

Boldrin, Michele; Montrucchio, Luigi

doi:10.1016/0022-0531(86)90005-0

Cited by 338 publications

(133 citation statements)

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“…For example, Caballé and Santos (1993) emphasize the presence of multiple steady states, meaning that economies with different initial endowments of physical and human capital will never converge in the absence of any exogenous disturbance. Other features are highlighted, for instance, by Boldrin and Montrucchio (1986), Nishimura, Shigoka and Yano (1998), Boldrin, Nishimura, Shigoka and Yano (2001) and related literature, who address the possibility of endogenous cycles in the competitive two-sector growth model; their main conclusion is that strange dynamics only occur in one of two circumstances: unrealistic values of parameters (e.g., a too low discount factor) or departures from the standard convex formulation of preferences and technology.…”

Section: Introductionmentioning

confidence: 99%

Decentralized Allocation of Human Capital and Nonlinear Growth

Gomes

2007

Comput Econ

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Abstract:The standard two-sector growth model with physical and human capital characterizes a process of material accumulation involving simple dynamics; constant long run growth is observable when assuming conventional Cobb-Douglas production functions in both sectors. This framework is developed under a central planner scenario: it is a representative agent that chooses between consumption and capital accumulation, on one hand, and between allocating human capital to each one of the two sectors, on the other. We concentrate in this second choice and we argue that the outcome of the aggregate model is incompatible with a scenario where individual agents, acting in a market economy, are free to decide, in each time moment, how to allocate their human capital in order to produce goods or to create additional skills. Combining individual incentives, the effort of a central planner (i.e., government) to approximate the decentralized outcome to the optimal result and a discrete choice rule that governs the decisions of individual agents, we propose a growth framework able to generate a significant variety of long term dynamic results, including endogenous fluctuations.

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Section: Introductionmentioning

confidence: 99%

Decentralized Allocation of Human Capital and Nonlinear Growth

Gomes

2007

Comput Econ

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“…That oscillating paths may appear in standard models of competitive equilibrium over time has already been demonstrated by Benhabib and Nishimura (1985) for the case of period-two cycles, and by Deneckere and Pelikan (1986) Boldrin and Montrucchio (1986) and Boldrin (1989) for the chaotic case. What distinguishes the current paper from the research in Deneckere and Pelikan (1986) and Boldrin and Montrucchio (1986) is that we do not construct 'artificial' economies that exhibit a pre-chosen dynamics in equilibrium.…”

Section: Introductionmentioning

confidence: 61%

“…A typical example has (Y = 0.2, y = 0.2, 6 = 0.25, and p = -0.5. Since the values for the discount factor at which chaos appears in the Cobb-Douglas model are themselves approximately 100 times larger than the ones found in the artificial economies constructed by Boldrin and Montrucchio (1986) and Deneckere and Pelikan (1986), no definite conclusion can be drawn, at this stage, as to whether a model of this type could produce chaotic dynamics at more reasonable values of the discount factor.…”

Section: Y)/(l -48o))= -(I -Y(~"))/(yw-y)mentioning

confidence: 87%

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Sources of complex dynamics in two-sector growth models

Boldrin

Deneckere

1990

Journal of Economic Dynamics and Control

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“…1b.e closest precedent of our work is that of Boldrln and Montrucchio (1986) who gave sufficlent condltlans far a standard growth model to generate a given c 2 dynamics.…”

Section: Introductionmentioning

confidence: 99%

General dynamics in overlapping generations models

Carrera

Morán

1995

Journal of Economic Dynamics and Control

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In this article we analyse the dynamics generated by the equilibrium solution in an overlapping generations model with production. we adopt an inverse approach to characterise and construct the class of economies that generates any twice continuously differentiable dynamics. To do this we introduce a tecbnique based on the theory of partial differential equations. RESUMENSe analiza en este artículo las dinámicas generadas por las soluciones de equilibrio en un modelo de generaciones sucesivas con producción. El punto de vista adoptado es el inverso. Es decir, se parte de una dinámica dos veces diferenciable cualquiera, y se caracterizan y se construyen las clases de economías que generan esta dinámica. Se prueba que dinámicas arbitrariamente caóticas pueden ser generadas por modelos convencionales. Para conseguir estos resultados, se introduce una técnica basada en las ecuaciones diferenciales en ~erivadas parciales.

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On the indeterminacy of capital accumulation paths

Cited by 338 publications

References 5 publications

Decentralized Allocation of Human Capital and Nonlinear Growth

Decentralized Allocation of Human Capital and Nonlinear Growth

Sources of complex dynamics in two-sector growth models

General dynamics in overlapping generations models

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