Multiple Economic Growth Equilibria

Saziye Gazioglu, W David McCausland

Research output: Contribution to journalArticle

Abstract

This paper extends the previous literature on multiple growth equilibria by constructing a multisectoral open economy small macro model. We consider the dynamics of international debt, physical capital accumulation and competitiveness, and show that there exist two distinct stable equilibria, one is a high growth equilibrium, corresponding to high investment and net international credit, the other is a low growth equilibrium corresponding to low investment and net international debt. We highlight the important link between economic growth (a flow variable) and net international debt/credit (a stock variable).
Original languageEnglish
Pages (from-to)261-263
Number of pages3
JournalApplied Economics Letters
Volume5
Issue number4
DOIs
Publication statusPublished - Apr 1998

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