We consider a two-sector economy with Cobb-Douglas technologies,labor-augmenting 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...

I will set up a discrete-time multi-sector optimal growth model with fixed labor and show the indeterminacy of an optimal steady state. The key assumptions are constant returns to scale technologies and a linear utility setup. Under those assumptions, I will show that there exists a plane,...

Recent industry-based empirical studies among countries demonstrate that individual industry's per capita capital stock and output grow at industry's own steady state growth rate. The industry growth rate is highly correlated to industry's technical progress measured by total factor productivity...

We consider a class of differential games with transition equations that are homogeneous of degree one. For any game G with a discount rate r, consider a Markov perfect equilibrium (MPE) with strategies that are linear in the state variables. We show that the time paths of the control variables...

This paper presents a standard two-sector optimal growth model with general neoclassical production functions: strictly quasi-concave, twice continuously differentiable homogeneous of degree one functions. The following two results will be established when the discount factor is sufficiently...