A Note on the Global Stability of a Simple Growth Model With Many Capital Goods

Abstract

Growth models with many assets represent an obvious advance beyond the simple one-sector model involving only a single real capital good, and permit discussion of portfolio choice, capital market trading conditions, and other important features of a general equili- brium system. One of the particularly interesting features of such models is the emergence of certain dynamic efficiency conditions, or capital market equilibrium conditions, when auxiliary variables interpreted as shadow prices of assets are introduced...