Dynamics of a two-sector endogenous growth model with intersectoral knowledge spillovers (Q926219)

In this paper a two sector endogenous growth model with learning inter-sectorial knowledge spillovers is studied. The authors obtained the following results: First the equilibrium path is locally unique if and only if the negative substitution effect is stronger (weaker) than the possibly positive income effect so that the excess demand curve is downward (upward) sloping. Second the income effect is negative if and only if a consumption good sector is more capital sensitive.