Abstract
In a magisterial work Galor (1992) has analysed the equilibrium dynamics of a two-sector overlapping-generations model with one homogeneous capital good. In contrast to the well-known result that the dynamics of capital accumulation is asymptotically stable if the consumption good sector is relatively more capital-intensive than the investment good sector (see Uzawa (1961) and Inada (1966) on non-overlapping-generations two-sector growth models with one homogeneous capital good), Galor (1992) detected the saddle-path property of the equilibrium dynamics which is characteristic of (also one-sector) optimal growth models and multi-sector descriptive growth models with heterogeneous capital goods.KeywordsEquilibrium DynamicGood SectorCapital ServiceYoung HouseholdOptimal Growth ModelThese keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.
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