In this paper we use global analysis techniques to analyze an economic growth model with environmental negative externalities, giving rise to a three-dimensional dynamic system (the framework is the one introduced by Wirl (1997) [53]). The dynamics of our model admits a locally attracting stationary state, which is, in fact, a poverty trap , coexisting with another stationary state possessing saddle-point stability. Global dynamical analysis shows that, under some conditions on the parameters, there exists a continuum of equilibrium trajectories approaching the attractor and one trajectory approaching the saddle point. Therefore, our model exhibits global indeterminacy.
Poverty trap and global indeterminacy in a growth model with open-access natural resources / M. Galeotti; A. Antoci; P. Russu. - In: JOURNAL OF ECONOMIC THEORY. - ISSN 0022-0531. - STAMPA. - 146 (2):(2011), pp. 569-591. [10.1016/j.jet.2010.12.003]
Poverty trap and global indeterminacy in a growth model with open-access natural resources
GALEOTTI, MARCELLO;ANTOCI, ANGELO;
2011
Abstract
In this paper we use global analysis techniques to analyze an economic growth model with environmental negative externalities, giving rise to a three-dimensional dynamic system (the framework is the one introduced by Wirl (1997) [53]). The dynamics of our model admits a locally attracting stationary state, which is, in fact, a poverty trap , coexisting with another stationary state possessing saddle-point stability. Global dynamical analysis shows that, under some conditions on the parameters, there exists a continuum of equilibrium trajectories approaching the attractor and one trajectory approaching the saddle point. Therefore, our model exhibits global indeterminacy.File | Dimensione | Formato | |
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