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Human Capital Formation and Patterns of Growth with Multiple Equilibria

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  • Mino, Kazuo

Abstract

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 balanced growth equilibria and indeterminacy of converging paths may emerge even in the absence of social increasing returns. Our results indicate that the standard endogenous growth model with small modifications would be useful to consider the reason why we often observe diverse growth performances among the countries with similar economic environments.

Suggested Citation

  • Mino, Kazuo, 2003. "Human Capital Formation and Patterns of Growth with Multiple Equilibria," MPRA Paper 58146, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:58146
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    References listed on IDEAS

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    1. Romer, Paul M, 1986. "Increasing Returns and Long-run Growth," Journal of Political Economy, University of Chicago Press, vol. 94(5), pages 1002-1037, October.
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    5. Antonio Ladrón-de-Guevara & Salvador Ortigueira & Manuel S. Santos, 1999. "A Two-Sector Model of Endogenous Growth with Leisure," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 66(3), pages 609-631.
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    12. Jess Benhabib & Qinglai Meng & Kazuo Nishimura, 2000. "Indeterminacy under Constant Returns to Scale in Multisector Economies," Econometrica, Econometric Society, vol. 68(6), pages 1541-1548, November.
    13. Mino, Kazuo, 2001. "Indeterminacy and Endogenous Growth with Social Constant Returns," Journal of Economic Theory, Elsevier, vol. 97(1), pages 203-222, March.
    14. Mino, Kazuo, 1999. "Non-separable utility function and indeterminacy of equilibrium in a model with human capital," Economics Letters, Elsevier, vol. 62(3), pages 311-317, March.
    15. Benhabib, Jess & Farmer, Roger E.A., 1999. "Indeterminacy and sunspots in macroeconomics," Handbook of Macroeconomics, in: J. B. Taylor & M. Woodford (ed.), Handbook of Macroeconomics, edition 1, volume 1, chapter 6, pages 387-448, Elsevier.
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    Cited by:

    1. Angelo Antoci & Marcello Galeotti & Paolo Russu, 2014. "Global analysis and indeterminacy in a two-sector growth model with human capital," International Journal of Economic Theory, The International Society for Economic Theory, vol. 10(4), pages 313-338, December.
    2. Danyang Xie, 2002. "Explicit Transitional Dynamics in Growth Models," GE, Growth, Math methods 0207003, University Library of Munich, Germany.
    3. Mino, Kazuo, 2002. "Indeterminacy in Two-Sector Models of Endogenous Growth with Leisure," MPRA Paper 16994, University Library of Munich, Germany.
    4. Hobara , Nobuhiro & Kuwahara, Shiro, 2023. "An Economic Growth Model with Education and Industriousness," Journal of Economic Development, The Economic Research Institute, Chung-Ang University, vol. 48(1), pages 35-57, March.

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    More about this item

    Keywords

    Human capital; multiple equilibria; endogenous growth;
    All these keywords.

    JEL classification:

    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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