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We construct a two-sector endogenous growth model in which productive government spending is essential for sustaining an economy's long-run growth. It is shown that, like the original one-sector [Barro, R.J., 1990. Government spending in a simple model of endogenous growth. Journal of Political Economy 98, 103-125] model, the balanced growth path (BGP) equilibrium is unique under some conditions. Unlike Barro (1990), however, our two-sector framework exhibits transitional dynamics. In fact, when the intertemporal elasticity of substitution for consumption is large, around the BGP equilibrium, there is a continuum of equilibrium paths whose growth rates commonly converge to a balanced growth rate. That is, the BGP equilibrium is indeterminate. JEL classification: O41; E62; E32 Keywords: Public services; Two-sector endogenous growth; Indeterminacy

To link to full-text access for this article, visit this link: http://dx.doi.org/10.1016/j.jmateco.2006.05.005 Byline: Junko Doi (a), Kazuo Nishimura (b), Koji Shimomura (c) Keywords: Endogenous growth; Externality; Stability; Trade pattern Abstract: We formulate a two-country endogenous growth model, which explain joint determination of long-run trade patterns and world growth rates. After providing the existence and local stability of the continuum of balanced growth paths, we show that main standard trade propositions hold under some modifications and that, subject to certain conditions concerning social and private rankings of factory intensities between production sectors, the higher is the growth rate, the smaller is the volume of international trade among balanced growth paths in the continuum. Author Affiliation: (a) Faculty of Economics, Kansai University, Yamate-cho, Suita, Osaka 564-8680, Japan (b) KIER, Kyoto University, Yoshida-Honmachi, Sakyo-ku, Kyoto 606-8501, Japan (c) RIEB, Kobe University, 2-1 Rokkodai-cho, Nada-ku, Kobe 657-8501, Japan Article History: Received 14 November 2005; Revised 18 May 2006; Accepted 27 May 2006 Article Note: (footnote) [star] We thank Christian Ghiglino, Takashi Kamihigashi and Gerhard Sorger for their useful comments on the earlier version of the paper.

A two-class model is discussed in which sufficient conditions for the final distribution of wealth to be independent of the initial distribution and conditions for saddle-point stability are given. This model focuses mainly on status-seeking out of the other factors like distribution of abilities, social prejudice, and racial discrimination.

The properties of equilibrium paths in a dynamic small open economy with external effects are studied. It is proved that indeterminacy can arise under constant returns to scale production functions and time preference.

Dynamic behavior of multiple countries' economic activities in a two-good, two-factor model, wherein the factors are internationally immobile and their technologies are subject to sector-specific external effects is presented.

A set of differential games with transition dynamics and constraints that are homogenous of degree one were analyzed to overcome its limitations. It was shown that linear homogenous are the most effective approaches to linear homogenous Markov strategies. Such approaches become appropriate only when the objective function's integrand is homogenous of a specified degree.

A simple dynamic general equilibrium model of durable goods monopoly was formulated under a discrete time framework. The model proved the validity of the amended Coase Conjecture, which claims the efficiency of monopolists under a proper tax-subsidy policy, even in situations where marginal cost is rising. The validity of the conjecture holds in given situations provided that every discrete model period is suffieciently short.

The adverse effect of intragenerational redistribution policies on economic development is analyzed. The analysis centers on redistributions that reduce incentives for education and acquisition of skills, and thus have a negative impact on the economic growth rate. To illustrate the moral hazard problem in education, a basic model of a closed economy that produces only one consumption good and its extension to a one-sector model with a standard neoclassical production function and a two-sector economy engaged in international trade is presented.

Abstract: Magnetovolume effect in Nd7Rh3 single crystal has been studied by measuring the magnetostriction as a function of external magnetic field at 4.2K. An irreversible magnetovolume effect having a negative remanent volume magnetostriction was observed when the external magnetic field was applied along the b-axis. The irreversible magnetostrictive effect takes place in the longitudinal magnetostriction along the b-axis. The remanent magnetostriction along the b-axis relaxes after removing external magnetic field for several hours and equilibrium state is stabilized. [Copyright &y& Elsevier]

Abstract: Amorphous transparent conductive oxide films in the In–Zn–O system were deposited on polycarbonate (PC) substrates by simultaneous DC sputtering of an In2O3 target and a ZnO target with either 4wt% Al2O3 or 7.5wt% Ga2O3 impurities. Although the resistivity of the amorphous, non-doped In–Zn–O film on PC was about one order of magnitude higher than that on the glass substrate, the resistivity of the In–Zn–O films with Ga2O3 impurities on PC substrates was reduced to the level of the non-doped In–Zn–O films on glass substrates. The addition of Al2O3 or Ga2O3 to the In–Zn–O films also induced the widening of the optical band gap, which would improve transparency at blue wavelengths. [Copyright &y& Elsevier]

Looks at a study which developed a dynamic general equilibrium model of durable goods monopoly. Indication that production in any industrialized economy consists of durable consumption goods; Indepth look at the theory of international trade; Results of the study.

Presents a study which focused on the class of differential games with transition dynamics and constraints, with reference to linear homogenous Markov strategies. Details on the usage of differential games by economists; What are Markov strategies; Findings of the study.