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Cycles and chaos in the one-sector growth model with elastic labor supply

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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 demon- strated by means of a specific example involving strong time-preference. The results are derived via constructive proofs that use Cobb-Douglas production functions.

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  • Gerhard Sorger, 2015. "Cycles and chaos in the one-sector growth model with elastic labor supply," Vienna Economics Papers vie1505, University of Vienna, Department of Economics.
    • Handle: RePEc:vie:viennp:vie1505
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    Cited by:

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    2. Hashimoto, Ken-ichi & Im, Ryonghun & Kunieda, Takuma & Shibata, Akihisa, 2022. "Financial destabilization," Journal of Mathematical Economics, Elsevier, vol. 103(C).
    3. Antoine Riche & Francesco Magris & Daria Onori, 2020. "Monetary rules in a two-sector endogenous growth model," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 69(4), pages 1049-1100, June.
    4. 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.
    5. Gori, Luca & Sodini, Mauro, 2020. "Endogenous labour supply, endogenous lifetime and economic development," Structural Change and Economic Dynamics, Elsevier, vol. 52(C), pages 238-259.
    6. Deng, Liuchun & Khan, M. Ali & Mitra, Tapan, 2020. "Exact parametric restrictions for 3-cycles in the RSS model: A complete and comprehensive characterization," Journal of Mathematical Economics, Elsevier, vol. 90(C), pages 48-56.

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    More about this item

    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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