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| Constantin Chilarescu |
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| ''The effect of externality on the transitional dynamics: the case of Lucas model.'' |
| ( 2018, Vol. 38 No.3 ) |
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| The main aim of this paper was to provide a closed-form solution to the model of Lucas with externalities and to prove that this solution is unique. The method we proposed enables us to determine the unknown starting values of the control variables and to obtain the optimal trajectories of all variables of the system. |
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| Keywords: endogenous growth model, externality effect, optimal solution,
transitional dynamics. |
JEL: C6 - Mathematical Methods and Programming: General
O4 - Economic Growth and Aggregate Productivity: General |
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| Manuscript Received : Mar 04 2018 | | Manuscript Accepted : Sep 08 2018 |
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