Using an endogenous growth model with physical and human capital accumulation, this paper considers the sustainability of economic growth when the use of a polluting input (e.g., fossil fuels) intensifies the risk of capital destruction through natural disasters. We find that growth is...

This paper studies the relationship between infrastructure expenditure and endogenous growth generated by spontaneous evolution in division of labor. It identifies the necessary condition for infrastructure expenditure to take place and its equilibrium time path. Dynamic equilibrium shows that...

This paper provides the complete closed-form solution to the Lucas two-sector model of endogenous growth. We study the issues of existence, uniqueness, multiplicity, positivity, transitional dynamics and long-run growth, related to the competitive equilibrium paths. We identify the parameter...

This paper considers transitional dynamics of a two-sector endogenous growth model in the Uzawa-Lucas framework. We find that when the ratio of physical to human capital is sufficiently high, it is optimal for both consumption and physical capital to fall for a finite period and then gradually...

Using an endogenous growth model with physical and human capital accumulation, this paper considers the sustainability of economic growth when the use of a polluting input (e.g., fossil fuels) intensifies the risk of capital destruction through natural disasters. We find that growth is...