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Endogenous Market Structure, Occupational Choice, and Growth Cycles

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  • Maria José Gil-Moltó
  • Dimitrios Varvarigos

Abstract

We model an industry that supplies intermediate goods in a growing economy. Agents can choose whether to provide labour or to become firm owners and compete in the industry. The idea that entry is determined through occupational choice has major implications for the economy’s intrinsic dynamics. Particularly, the results show that economic dynamics are governed by endogenous volatility in the determination of both the number of industry entrants and in the growth rate of output. Consequently, we argue that occupational choice and the structural characteristics of the endogenous market structure can act as both the impulse source and the propagation mechanism of economic fluctuations.

Suggested Citation

  • Maria José Gil-Moltó & Dimitrios Varvarigos, 2013. "Endogenous Market Structure, Occupational Choice, and Growth Cycles," Discussion Papers in Economics 13/05, Department of Economics, University of Leicester.
  • Handle: RePEc:lec:leecon:13/05
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Overlapping generations; Endogenous cycles; Firms’ entry; Industry Dynamics;

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure

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