A BEJM Topics article.

Abstract

In this note, we extend Xie (JET, 1994) to solve analytically the Lucas model with a weak externality in a specific parametric case. In particular, we characterize the shape of imbalance effects in this model. Our results are mostly consistent with the findings of the related computational literature. Among other analytical findings, we prove that, while U-shaped imbalance effects are not apparent in the Lucas model for the growth rate of output per capita, the level of such a variable may exhibit this shape.

Submitted: June 11, 2004 · Accepted: November 24, 2004 · Published: December 13, 2004

Originally published in Topics in Macroeconomics.

Recommended Citation

Boucekkine, Raouf and Ruiz Tamarit, Ramon (2004) "Imbalance Effects in the Lucas Model: an Analytical Exploration," Topics in Macroeconomics: Vol. 4 : Iss. 1, Article 15.
Available at: http://www.bepress.com/bejm/topics/vol4/iss1/art15