In this paper we study the dynamics of endogenous growth, both in the model of Lucas and in a generalization that incorporates a labor-leisure choice. We characterize the regions of the parameter space that give rise to unique equilibria as well as the regions that yield a continuum of equilibria with positive growth rates. We find that such multiple equilibria exist for empirically very plausible parameters, in particular when the Lucas model is modified to incorporate endogenous labor. Journal of Economic Literature Numbers: E00, E3, O40.
ASJC Scopus subject areas
- Economics and Econometrics