We study a class of two-sector endogenous growth models in the presence of a positive external effect. The class of models exhibits global indeterminacy of equi-libria. The qualitative properties of a set of examples are analyzed by means of analytical and numerical methods. We also construct robust examples of both topological and ergodic chaos.
Bewley considers a dynamic general equilibrium model with heterogeneous consumers. Assuming that the future is sufficiently important, he shows that an equilibrium path converges to a limit which depends upon initial conditions. This study shows that the limit lies near the stationary state independent of initial conditions. This state is the economy's… (More)