Chen, Been-Lon; Hsu, Yu-Shan; Mino, Kazuo - Institute of Economic Research, Kyoto University - 2012
One-sector neoclassical growth models reveal that consumption externalities lead to inefficient allocation in a steady state and indeterminate equilibrium toward the steady state only if there is a labor-leisure tradeoff. This paper shows that in a two-sector neoclassical growth model, even...