Article ID Journal Published Year Pages File Type
5100057 Journal of Economic Theory 2017 42 Pages PDF
Abstract
This paper shows that chaotic dynamics and global indeterminacy may characterize the Lucas (1988) endogenous growth model in its local determinacy region of the parameter space. This is achieved by means of the Shilnikov (1965) theorem, which exploits the existence of a family of homoclinic orbits doubly asymptotic to the balanced growth path, when it is a saddle-focus. The economic implications of these results are also discussed.
Related Topics
Social Sciences and Humanities Economics, Econometrics and Finance Economics and Econometrics
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