Investment sector stability ensures economic growth in two-sector models.
The article explores how different types of investments in different sectors of the economy can affect economic stability. The researchers found that when investments in one sector cannot fully replace investments in another sector, the economy is more likely to remain stable. They showed that for most realistic scenarios, the economy will not experience unpredictable fluctuations near a stable state. This is because a certain level of external influence is needed to cause instability, which is not typically present in real-world situations. Overall, the study suggests that having a moderate level of flexibility in how investments are allocated can help maintain a steady economy.