Local and Global Dynamics in a Discrete Time Growth Model with Nonconcave Production Function

Figure 7

K-L staircase diagram for the following parameter values: 𝛿=0.2, 𝛼=0.4, 𝛽=0.9, 𝑛=0.5, 𝑠_𝑤=0.1, 𝑠_𝑟=0.9, and 𝑝=11. (a) 𝑘₀=1.26 generates a trajectory converging to 𝐴 consisting in a complex set; (b) 𝑘₀=1.27 generates a trajectory converging to 𝐴₀.

(a)

(b)