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We address the local home environment externality conceptualized by Galor and Tsiddon (1997a; 1997b) in the two sector growth model of Lucas (1988). We show that this version of externality related to human capital accumulation process can be a source of indeterminacy. -- Local home environmental...
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agents across the different alternatives. We analyze the case of linear positive externalities. Assuming a simple Markovian …
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