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Equilibrium dynamics in an aggregative model of capital accumulation with heterogeneous agents and elastic labor

Author

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  • Cuong Le Van

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

  • Manh-Hung Nguyen

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

  • Yiannis Vailakis

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

Abstract

The paper extends the canonical representative agent Ramsey model to include heterogeneous agents and elastic labor supply. The welfare maximization problem is analyzed and shown to be equivalent to a non-stationary reduced form model. An iterative procedure is exploited to prove the supermodularity of the indirect utility function. Supermodularity is subsequently used to establish the convergence of optimal paths.

Suggested Citation

  • Cuong Le Van & Manh-Hung Nguyen & Yiannis Vailakis, 2007. "Equilibrium dynamics in an aggregative model of capital accumulation with heterogeneous agents and elastic labor," Post-Print halshs-00101237, HAL.
    • Handle: RePEc:hal:journl:halshs-00101237
    DOI: 10.1016/j.jmateco.2006.06.003
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00101237
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    as
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    2. Cuong Le Van & Yiannis Vailakis, 2003. "Existence of a competitive equilibrium in a one sector growth model with heterogeneous agents and irreversible investment," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 22(4), pages 743-771, November.
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    14. Cuong Le Van & Yiannis Vailakis, 2003. "Existence of a competitive equilibrium in a one sector growth model with heterogeneous agents and irreversible investment," Post-Print halshs-00119095, HAL.
    15. Truman Bewley, 2010. "An Integration of Equilibrium Theory and Turnpike Theory," Levine's Working Paper Archive 1381, David K. Levine.
    16. Robert A. Becker, 1980. "On the Long-Run Steady State in a Simple Dynamic Model of Equilibrium with Heterogeneous Households," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 95(2), pages 375-382.
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    Citations

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    Cited by:

    1. Goenka, Aditya & Nguyen, Manh-Hung, 2009. "Existence of Competitive Equilibrium in an Optimal Growth Model with Elastic Labor Supply and Smoothness of the Policy Function," TSE Working Papers 09-064, Toulouse School of Economics (TSE).
    2. Robert Becker & Stefano Bosi & Cuong Van & Thomas Seegmuller, 2015. "On existence and bubbles of Ramsey equilibrium with borrowing constraints," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 58(2), pages 329-353, February.
    3. Takashi Kamihigashi, 2015. "Multiple interior steady states in the Ramsey model with elastic labor supply," International Journal of Economic Theory, The International Society for Economic Theory, vol. 11(1), pages 25-37, March.
    4. Stefano Bosi & Eleni Iliopulos & Hubert Jayet, 2011. "Optimal Immigration Policy: When The Public Good Is Rival," The Japanese Economic Review, Japanese Economic Association, vol. 62(4), pages 460-484, December.
    5. Bosi, Stefano & Seegmuller, Thomas, 2010. "On the Ramsey equilibrium with heterogeneous consumers and endogenous labor supply," Journal of Mathematical Economics, Elsevier, vol. 46(4), pages 475-492, July.
    6. Aditya Goenka & Cuong Le Van & Manh-Hung Nguyen, 2011. "A study of the dynamic of influence through differential equations," Documents de travail du Centre d'Economie de la Sorbonne 11023, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
    7. Stefano Bosi & Cuong Le Van, 2011. "On the existence of a Ramsey equilibrium with endogenous labor supply and borrowing constraints," Post-Print halshs-00612131, HAL.
    8. repec:ipg:wpaper:201404 is not listed on IDEAS
    9. Goenka, Aditya & Le Van, Cuong & Nguyen, Manh-Hung, 2012. "Existence Of Competitive Equilibrium In An Optimal Growth Model With Heterogeneous Agents And Endogenous Leisure," Macroeconomic Dynamics, Cambridge University Press, vol. 16(S1), pages 33-51, April.
    10. Nishimura, Kazuo & Nourry, Carine & Seegmuller, Thomas & Venditti, Alain, 2016. "Public Spending As A Source Of Endogenous Business Cycles In A Ramsey Model With Many Agents," Macroeconomic Dynamics, Cambridge University Press, vol. 20(2), pages 504-524, March.
    11. Goenka, Aditya & Nguyen, Manh-Hung, 2011. "Equilibrium in the growth model with an endogenous labor-leisure choice," LERNA Working Papers 11.06.340, LERNA, University of Toulouse.
    12. Robert Becker & Stefano Bosi & Cuong Le Van & Thomas Seegmuller, 2012. "On existence, efficiency and bubbles of Ramsey equilibrium with borrowing constraints," Caepr Working Papers 2012-001, Center for Applied Economics and Policy Research, Economics Department, Indiana University Bloomington.
    13. Borissov, Kirill & Dubey, Ram Sewak, 2015. "A characterization of Ramsey equilibrium in a model with limited borrowing," Journal of Mathematical Economics, Elsevier, vol. 56(C), pages 67-78.
    14. Goenka, Aditya & Nguyen, Manh-Hung, 2020. "General existence of competitive equilibrium in the growth model with an endogenous labor–leisure choice," Journal of Mathematical Economics, Elsevier, vol. 91(C), pages 90-98.
    15. repec:hal:journl:hal-01302535 is not listed on IDEAS
    16. Augeraud-Veron, Emmanuelle & Boucekkine, Raouf & Gozzi, Fausto & Venditti, Alain & Zou, Benteng, 2024. "Fifty years of mathematical growth theory: Classical topics and new trends," Journal of Mathematical Economics, Elsevier, vol. 111(C).
    17. Becker, Robert A. & Borissov, Kirill & Dubey, Ram Sewak, 2015. "Ramsey equilibrium with liberal borrowing," Journal of Mathematical Economics, Elsevier, vol. 61(C), pages 296-304.
    18. Robert Becker & Stefano Bosi & Cuong Le Van & Thomas Seegmuller, 2012. "On existence, efficiency and bubbles of Ramsey equilibrium with borrowing constraints," CAEPR Working Papers 2012-001, Center for Applied Economics and Policy Research, Department of Economics, Indiana University Bloomington.
    19. repec:hal:psewpa:halshs-00793530 is not listed on IDEAS
    20. repec:ipg:wpaper:2013-004 is not listed on IDEAS
    21. Jean-Michel Grandmont, 2013. "Tribute to Cuong Le Van," International Journal of Economic Theory, The International Society for Economic Theory, vol. 9(1), pages 5-10, March.
    22. repec:ipg:wpaper:4 is not listed on IDEAS
    23. Becker, Robert A. & Borissov, Kirill & Dubey, Ram Sewak, 2015. "Ramsey equilibrium with liberal borrowing," Journal of Mathematical Economics, Elsevier, vol. 61(C), pages 296-304.

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    More about this item

    Keywords

    heterogeneous agents; Single-sector growth model; supermodularity; elastic labor supply;
    All these keywords.

    JEL classification:

    • C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium
    • D51 - Microeconomics - - General Equilibrium and Disequilibrium - - - Exchange and Production Economies
    • E13 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Neoclassical

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