MULTIPLE STEADY-STATES, INDETERMINACY, AND CYCLES IN A BASIC MODEL OFENDOGENOUS GROWTH

The goal of this paper is to demonstrate that a basic model of endogen ous growth with learning by doing may produce a rich array of outcomes . Starting point of our analysis is the Romer (1986a) approach. In con trast to Romer, however, we assume that one unit of investment shows d ifferent effects concerning the building up of physical and human capi tal, so that these variables cannot be merged into one single variable . With this assumption, it can be shown that multiple steady states, i ndeterminacy of equilibria, and persistent cycles may result in our mo del.