Di!erential savings, factor shares, and endogenous growth cycles

The paper analyzes the dynamic properties of the neoclassical one-sector growth model with di!erential savings in the sense of Kaldor}Pasinetti. The economy exhibits unstable steady states and #uctuations if the income distribution varies su$ciently and if shareholders save more than workers. The paper analyzes in detail the dynamics for the case with a "xed proportions technology as well as with a smooth approximation. If the savings propensities di!er by an arbitrarily small amount, the system exhibits topological chaos in the sense of Li and Yorke for an open set of production functions. The analytical results are supplemented by numerical experiments