Endogenous Growth and Limit Cycle

• Main Authors: Yang Wen-Yi, 楊文儀
• Other Authors: Lai Chin-Chang
• Format: Others
• Language: zh-TW
• Published: 2004
• Online Access: http://ndltd.ncl.edu.tw/handle/74824209066412471029

碩士 === 淡江大學 === 國際貿易學系 === 92 === This research takes advantage of two-sector growth model to highlight the fact that complex dynamic growth rate is possible even under endogenous growth model following e.g. Romer (1986) ,Lucas(1988). The dynamic equilibrium path of the capital stock is quite different from the traditional endogenous growth models which advocate that economic growth rate could persist without bound. In the first part of this thesis, we show that equilibrium capital stock may emerge limit cycle under distinct spillover effects between two sectors using Hopf-Bifurcation theorem. Therefore, even absent from factor reversals (Boldrin,1990) or the change of expectation (Evans,1998), economic growth will still cause cyclical fluctuation through the mechanism of distinctive growth rate of two sector. In the second part of this thesis, the pattern of cyclical fluctuation is successfully simulated. Moreover, the ratio of time preference plays key factor influencing whether the system is cyclically fluctuant ,stable or not through simulation. We conclude that the ratio of time preference equal to 1 is the necessary condition to cause limit cycle. On the other hand, the system will be orbitally stable when the ratio of time preference is greater than 1. Finally, the system will be locally stable and converge to steady state if the ratio of time preference is smaller than 1.