ENDOGENOUS GROWTH CYCLES - ARROWS LEARNING BY DOING RECONSIDERED

A two-sector growth model is presented. in which human capital is acqu ired through learning by doing. It is shown that, for both the competi tive situation and the social optimum, endogenous growth cycles may be tile outcome. Concerning the economic prerequisite for persistent osc illations we detect a bunching of investment at nearby dates leading e conomic variables to overshoot the long-run steady state values. This clustering of investment, for its part, may be caused by adjacent comp lementarity with respect to the stocks or by a sufficiently strong ext ernal effect of investment on the marginal product of physical capital or on the opportunity costs of investment.