Capital-Labor Substitution and Competitive Nonlinear Endogenous Business Cycles
We develop in this paper simple geometrical methods to study local indeterminacy, bifurcations and stochastic (sunspot) equilibria near a steady state, in nonlinear two dimensional economic models. We present stochastic sunspot equilibria, which allows a constructive description of local bifurcations. The latter analysis is relevant when some eigenvalues of the linearized dynamics, near the steady state, have a modulus close to one (“unit root(s)”), as taking into account small nonlinearities generates linear local approximation. These methods are applied to a simple aggregative model (Woodford (JET, 1986)), to study in particular the influence of capital-labor substitution and of the aggregate labor supply wage elasticiy, on the occurrence of competitive endogenous deterministic or stochastic fluctuations.
(This abstract was borrowed from another version of this item.)
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Grandmont, Jean-Michel, 1986.
"Stabilizing competitive business cycles,"
Journal of Economic Theory,
Elsevier, vol. 40(1), pages 57-76, October.
- Pintus, Patrick & Sands, Duncan & de Vilder, Robin, 2000.
"On the transition from local regular to global irregular fluctuations,"
Journal of Economic Dynamics and Control,
Elsevier, vol. 24(2), pages 247-272, February.
- Patrick Pintus & Ducan Sands & Robin De Vilder, 1998. "On the Transition from Local Regular to Global Irregular Fluctuations," Working Papers 98-54, Centre de Recherche en Economie et Statistique.
- Pintus, P. & Sands, D. & de Vilder, R., 1998. "On the Transition from Local Regular to Global Iregular Fluctuations," Papers 9818, Paris X - Nanterre, U.F.R. de Sc. Ec. Gest. Maths Infor..
- P. Pintus & D. Sands & R. de Vilder, 1998. "On the transition from local regular to global irregular fluctuations," THEMA Working Papers 98-18, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
- Pintus, Patrick & Sands, Ducan & De Vilder, Robin, 1996. "On the transition from local regular to global irregular fluctuations," CEPREMAP Working Papers (Couverture Orange) 9617, CEPREMAP.
- de Vilder, Robin, 1996. "Complicated Endogenous Business Cycles under Gross Substitutability," Journal of Economic Theory, Elsevier, vol. 71(2), pages 416-442, November.
- Benhabib, Jess & Laroque, Guy, 1986.
"On Competitive Cycles in Productive Economies,"
86-19, C.V. Starr Center for Applied Economics, New York University.
- Jean-Michel Grandmont, 2008.
"Nonlinear Difference Equations, Bifurcations and Chaos: An Introduction,"
2008_23, Department of Economics, University of Venice "Ca' Foscari".
- Grandmont, Jean-Michel, 2008. "Nonlinear difference equations, bifurcations and chaos: An introduction," Research in Economics, Elsevier, vol. 62(3), pages 122-177, September.
- Grandmont Jean-michel, 1988. "Nonlinear difference equations bifurcations and chaos : an introduction," CEPREMAP Working Papers (Couverture Orange) 8811, CEPREMAP.
- Jean-Michel Grandmont, 2008. "Nonlinear Difference Equations, Bifurcation and Chaos : An Introduction”," Working Papers 2008-19, Centre de Recherche en Economie et Statistique.
- Reichlin, Pietro, 1986. "Equilibrium cycles in an overlapping generations economy with production," Journal of Economic Theory, Elsevier, vol. 40(1), pages 89-102, October.
- Kiminori Matsuyama, 1990.
"Increasing Returns, Industrialization and Indeterminacy of Equilibrium,"
878, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Kiminori Matsuyama, 1991. "Increasing Returns, Industrialization, and Indeterminacy of Equilibrium," The Quarterly Journal of Economics, Oxford University Press, vol. 106(2), pages 617-650.
- Cass, David & Shell, Karl, 1983. "Do Sunspots Matter?," Journal of Political Economy, University of Chicago Press, vol. 91(2), pages 193-227, April.
- Benhabib, Jess & Farmer, Roger E.A., 1991.
"Indeterminacy and Increasing Returns,"
91-59, C.V. Starr Center for Applied Economics, New York University.
- Chiappori, P.A. & Guesnerie, R., 1990.
"Sunspot Equilibria in Sequential Markets Models,"
DELTA Working Papers
90-05, DELTA (Ecole normale supérieure).
- Boldrin, Michele & Woodford, Michael, 1990.
"Equilibrium models displaying endogenous fluctuations and chaos : A survey,"
Journal of Monetary Economics,
Elsevier, vol. 25(2), pages 189-222, March.
- Michele Boldrin & Michael Woodford, 1988. "Equilibruim Models Displaying Endogenous Fluctuations and Chaos: A Survey," UCLA Economics Working Papers 530, UCLA Department of Economics.
- Brock, William A. & Dechert, W. Davis, 1991.
"Non-linear dynamical systems: Instability and chaos in economics,"
Handbook of Mathematical Economics,
in: W. Hildenbrand & H. Sonnenschein (ed.), Handbook of Mathematical Economics, edition 1, volume 4, chapter 40, pages 2209-2235
- Brock, W.A. & Dechert, W.D., 1990. "Nonlinear Dynamical Systems Instability And Chaos In Economics," Working papers 90-17, Wisconsin Madison - Social Systems.
- Costas Azariadis & Roger Guesnerie, 1986. "Sunspots and Cycles," Review of Economic Studies, Oxford University Press, vol. 53(5), pages 725-737.
- Roger Guesnerie & Costas Azariadis, 1982. "Prophéties créatrices et persistance des théories," Revue Économique, Programme National Persée, vol. 33(5), pages 787-806.
- Benhabib Jess & Rustichini Aldo, 1994. "Introduction to the Symposium on Growth, Fluctuations, and Sunspots: Confronting the Data," Journal of Economic Theory, Elsevier, vol. 63(1), pages 1-18, June.
- Azariadis, Costas, 1981. "Self-fulfilling prophecies," Journal of Economic Theory, Elsevier, vol. 25(3), pages 380-396, December.
- David Cass & Menahem E. Yaari, 1966.
"A Re-examination of the Pure Consumption Loans Model,"
Journal of Political Economy,
University of Chicago Press, vol. 74, pages 353-353.
- David Cass & Menahem E. Yaari, 1965. "A Re-Examination of the Pure Consumption Loans Model," Cowles Foundation Discussion Papers 195, Cowles Foundation for Research in Economics, Yale University.
- Woodford, Michael, 1986. "Stationary sunspot equilibria in a finance constrained economy," Journal of Economic Theory, Elsevier, vol. 40(1), pages 128-137, October.
When requesting a correction, please mention this item's handle: RePEc:eee:jetheo:v:80:y:1998:i:1:p:14-59. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Shamier, Wendy)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.