Multiplicity of Dynamic Equilibria and Global Efficiency
Marini GiancarloSenesi Pietro
CEIS Research Paper
Within a one-sector, infinite-horizon representative agent model with technological externalities and a convex-concave production function, this paper derives a capital subsidy policy that simultaneously eliminates the wedge between private and social marginal products of capital, and achieves a globally efficient allocation.
Keywords: nonconvexities, technological externalities, dynamic equilibrium allocations
JEL codes: C61, D62, H21
Date: Thursday, June 10, 2004
Revision Date: Thursday, June 10, 2004