We extend the Barro (1990) model of endogenous growth to a two-sector one which consists of pure consumption and investment goods. It is possible that the extended version has a unique balanced growth rate such that for given initial values of state variables, (i) the extended model economy...

We consider a discrete-time two-sector Cobb-Douglas economy with positive sector specific external effects. We show that indeterminacy of steady states and cycles can easily arise with constant or decreasing social returns to scale, and very small market imperfections. This is in sharp contrast...

We analyze sunspot-driven fluctuations in the standard 2-sector RBC model with moderate increasing returns to scale. We provide a detailed theoretical analysis enabling us to derive relevant bifurcation loci and to characterize the steady-state local stability properties as a function of various...