THE GENERAL INSTABILITY OF A CLASS OF COMPETITIVE GROWTH PROCESSES.
STANFORD UNIV CALIF INST FOR MATHEMATICAL STUDIES IN THE SOCIAL SCIENCES
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The paper deals with the instability properties of competitive growth systems which are always in equilibrium. The paper approaches the problem from the standpoint of the theory of optimal growth. It is shown that any competitive growth process which can be constructed from an optimization of an intertemporal utility function is unstable. The inverse optimal problem is then solved for the Solow model, and it is argued that the model looks stable but is not. Author
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