On intersectoral allocations, factors substitutability, and multiple long run growth paths

Jean-Pierre Drugeon, Odile Poulsen, Alain Venditti

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13 Citations (Scopus)


This article considers a two-sector model of economic growth with “labour-augmenting” intersectoral external effects stemming from the aggregate capital stock. It is shown that equilibrium balanced growth paths with a non-trivial labour allocation scheme become available. A set of sufficient conditions for the existence of multiple equilibrium growth rays is provided and their determinacy properties are then characterised. Finally, examination of a parameterised C.E.S. economy illustrates the central role of non-unitary values for the elasticity of substitution in the multiplicity issue.
Original languageEnglish
Pages (from-to)175-183
Number of pages9
JournalEconomic Theory
Issue number1
Publication statusPublished - 2003

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