| Title |
Poverty trap and global indeterminacy in a growth model with open-access natural resources |
| ID_Doc |
77711 |
| Authors |
Antoci, A; Galeotti, M; Russu, P |
| Title |
Poverty trap and global indeterminacy in a growth model with open-access natural resources |
| Year |
2011 |
| Published |
Journal Of Economic Theory, 146, 2 |
| DOI |
10.1016/j.jet.2010.12.003 |
| Abstract |
In this paper we use global analysis techniques to analyze an economic growth model with environmental negative externalities, giving rise to a three-dimensional dynamic system (the framework is the one introduced by Wirl (1997) [53]). The dynamics of our model admits a locally attracting stationary state P-1*, which is, in fact, a poverty trap, coexisting with another stationary state P-2* possessing saddle-point stability. Global dynamical analysis shows that, under some conditions on the parameters, if the initial values of the state variables are close enough to the coordinates of P-1*, then there exists a continuum of equilibrium trajectories approaching P-1* and one trajectory approaching P-2*. Therefore, our model exhibits global indeterminacy, since either P-1* or P-2* can be selected according to agent expectations. Moreover, we prove that conditions guaranteeing the attractivity of P-1* also imply the saddle-point stability of P-2*. However, when P-1* is not attractive, numerical simulations show the possible existence of one or two limit cycles: an attractive one surrounding P-1* and one endowed with a two-dimensional stable manifold surrounding P-2*. (C) 2010 Elsevier Inc. All rights reserved. |
| Author Keywords |
Global and local indeterminacy; Poverty trap; Environmental externalities; History versus expectations; Open-access natural resources |
| Index Keywords |
Index Keywords |
| Document Type |
Other |
| Open Access |
Open Access |
| Source |
Social Science Citation Index (SSCI) |
| EID |
WOS:000289597900007 |
| WoS Category |
Economics |
| Research Area |
Business & Economics |
| PDF |
https://flore.unifi.it/bitstream/2158/396445/1/Poverty%20trap.pdf
|