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Factor Intensity Reversal and Ergodic Chaos

Author

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  • Goenka, Aditya

    (Department of Economics, Aarhus School of Business)

  • Poulsen, Odile

    (Department of Economics, Aarhus School of Business)

Abstract

This paper studies a two-sector endogenous growth model with labour augmenting externalities or Harrod-Neutral technical change. The technologies are general and the preferences are of the CES class. If con- sumers are su±ciently patient, ergodic chaos and geometric sensitivity to initial conditions can emerge if either (1) there is factor intensity reversal; or (2) if the consumption goods producing sector is always capital intensive. The upper bound on the discount rate is determined only by the transver- sality condition. If utility is linear, there can be chaos only if there is factor intensity reversal

Suggested Citation

  • Goenka, Aditya & Poulsen, Odile, 2004. "Factor Intensity Reversal and Ergodic Chaos," Working Papers 04-13, University of Aarhus, Aarhus School of Business, Department of Economics.
    • Handle: RePEc:hhs:aareco:2004_013
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    File URL: http://www.hha.dk/nat/wper/04-13_agodp.pdf
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    References listed on IDEAS

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    Cited by:

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    3. Orlando Gomes, 2007. "Routes to chaos in macroeconomic theory," Journal of Economic Studies, Emerald Group Publishing, vol. 33(6), pages 437-468, January.
    4. Gomes, Orlando, 2009. "A two-dimensional non-equilibrium dynamic model," Structural Change and Economic Dynamics, Elsevier, vol. 20(3), pages 221-238, September.
    5. Orlando Gomes, 2010. "Consumer confidence, endogenous growth and endogenous cycles," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 37(4), pages 377-404, September.
    6. Orlando Gomes, 2006. "Routes to chaos in macroeconomic theory," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 33(6), pages 437-468, November.
    7. Orlando Gomes, 2006. "Routes to chaos in macroeconomic theory," Journal of Economic Studies, Emerald Group Publishing, vol. 33(6), pages 437-468, November.

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    More about this item

    Keywords

    Ergodic Chaos; Two-sector endogenous growth model; Factor intensity reversal; Labor-augmenting externalities;
    All these keywords.

    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • D90 - Microeconomics - - Micro-Based Behavioral Economics - - - General
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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