Chen, Been-Lon; Hsu, Yu-Shan; Mino, Kazuo - Institute of Economics, Academia Sinica - 2013
In one-sector neoclassical growth models, consumption externalities lead to an inefficient allocation in a steady state and indeterminate equilibrium toward a steady state only if there is a labor-leisure tradeoff. This paper shows that in a two-sector neoclassical growth model, even without a...