Cycles and chaos in the one-sector growth model with elastic labor supply
- Author(s)
- Gerhard Sorger
- Abstract
It is shown that the discrete-time version of the neoclassical one-sector optimal growth model with elastic labor supply and standard monotonicity and convexity assumptions on technology and preferences can have periodic solutions of any period as well as chaotic solutions. The optimality of these non-monotonic solutions is traced back to strong income effects. When technology and preferences are parameterized as it is commonly done in quantitative macroeconomic studies, these phenomena cannot occur.
- Organisation(s)
- Department of Economics
- Journal
- Economic Theory
- Volume
- 65
- Pages
- 55-77
- No. of pages
- 23
- ISSN
- 0938-2259
- DOI
- https://doi.org/10.1007/s00199-016-1005-0
- Publication date
- 01-2018
- Peer reviewed
- Yes
- Austrian Fields of Science 2012
- 502047 Economic theory
- Keywords
- ASJC Scopus subject areas
- Economics and Econometrics
- Portal url
- https://ucris.univie.ac.at/portal/en/publications/cycles-and-chaos-in-the-onesector-growth-model-with-elastic-labor-supply(27a58667-5be8-416f-bc1a-070f4045e95d).html