CLOSED-FORM SOLUTIONS FOR THE LUCAS-UZAWA GROWTH MODEL WITH LOGARITHMIC UTILITY PREFERENCES VIA THE PARTIAL HAMILTONIAN APPROACH

摘要

In this paper, we present a dynamic picture of the two sector Lucas-Uzawa model with logarithmic utility preferences and homogeneous technology as was proposed by Bethmann [3] for a Robinson Crusoe economy. We use a newly developed partial Hamiltonian approach to derive a new set of closed-form solutions for the model with logarithmic utility preferences and homogeneous technology. Unlike the previous literature, our model yields three distinct closed-form solutions to the model. We establish the growth rates of all the variables which fully describe the dynamics of the model. Even though the first closed-form solution provides static growth rates and the other two provide dynamic growth rates, in the long run all the closed-form solutions approach the same static balanced growth path.