This paper studies the relation between patterns of long-term economic growth and indeterminacy of equilibrium in an endogenous growth model with human capital formation. By introducing sector-specific externalities and a non-separable utility function into the Lucas model, we show that multiple...

This paper shows that multiple and globally indeterminate long-run growth rates can easily arise in the two-sector growth model introduced by Lucas (1988). This result is generated by the existence of diminishing returns to time at the private level in human capital accumulation and the...

This paper investigates the redistributive effects of taxation on occupational choice and growth. We discuss a twoñsector economy in the spirit of Romer (1990). Agents engage in one of two alternative occupations: either selfñemployment in an intermediate goods sector characterized by...

The closed economy neoclassical model predicts lung-run convergence in per-capita income. We show, within a neoclassical framework, that international trade among two countries differing only in their initial capital endowment generates long-run income differences. Our results suggests that...

The demographic transition is introduced into the otherwise standard Ramsey model to generate multiple equilibria, poverty traps, and demography-driven cycles. The model is calibrated for global data to explore the demographic conditions under which multiplicity is realized. Three cases arise,...

We develop a growth model with unemployment due to imperfections in the labor market. In this model, wage inertia and balanced budget rules cause a complementarity between capital and employment capable of explaining the existence of multiple equilibrium paths. Hysteresis is viewed as the result...

This paper compares Kaleckian and Harrodian models of accumulation. The simplicity of the canonical Kaleckian model is appealing but more complex Harrodian specifications are preferable from a behavioral perspective. The local instability of Harrodian-inspired specifications, moreover, offers a...