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 endogenous labor supply and standard assumptions on technology and preferences admits periodic solutions of any period as well as chaotic solutions. Solutions with period 2 are possible for any time-preference factor between 0 and 1, whereas the existence of periodic solutions with other periods and the existence of chaotic solutions are only demonstrated by means of a specific example involving strong time-preference. The results are derived via constructive proofs that use Cobb-Douglas production functions.

Organisation(s)
Department of Economics
No. of pages
21
Publication date
05-2015
Austrian Fields of Science 2012
502047 Economic theory
Keywords
Portal url
https://ucrisportal.univie.ac.at/en/publications/cycles-and-chaos-in-the-onesector-growth-model-with-elastic-labor-supply(9795b334-75c3-4b82-8ed8-91caa34aac02).html