Title: Non-Linearity and Business Cycles in a Two-Sector Equilibrium Model: An Example with Cobb-Douglas Production Functions
Abstract: This study presents a two-sector optimal growth model with Cobb-Douglas production functions in which optimal dynamics exhibits sharp non-linearity giving rise to cyclical optimal paths. This result demonstrates that such optimal paths may appear for any value of the discount factor of future utilities. Moreover, once a cyclical optimal path appears for a particular value, it appears for any value that discounts the future utilities stronger than that particular value.
Publication Year: 1995
Publication Date: 1995-01-01
Language: en
Type: book-chapter
Indexed In: ['crossref']
Access and Citation
Cited By Count: 21
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