A Simple Model of Schumpeterian Growth with Complex Dynamics

In this paper, we develop a Schumpeterian discrete-time model of endogeneous growth with an explicit market for the resource used for innovation-creating investment, and study its global dynamics. We show, among others, that the level of investment may fluctuate chaotically for a compact range of model parameters, as a consequence of the explicit intermediation and market imperfections (temporary monopoly power following an innovation) underlying the growth process.