Abstract

This paper analyzes the equilibrium paths leading to a long-run stationary state in a one-sector model in which a self-reproducing non-basic is produced. It is shown that, provided external effects are absent, the equilibrium path is unique, although multiple long-run equilibria may exist under decreasing returns. When costs are decreasing, uniqueness of the equilibrium path is lost. Even local uniqueness may fail if strong scale economies in the use of primary resources and/or basic commodities are coupled with diseconomies in the use of the non-basic commodity.