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Uniqueness and Stability of Equilibria in a Model with Endogenous Markups and Labor Supply

Author

Listed:
  • Yangru Wu

    (Department of Finance & Economics, Rutgers Business School, Rutgers University)

  • Junxi Zhang

    (School of Economics and Finance, University of Hong Kong)

Abstract

The presence of public policy in models with multiple steady states is known to be capable of reducing the set of equilibria. This paper shows that in a simple growth model with endogenous markups, introducing an endogenous laborleisure choice also helps eliminate multiple steady state equilibria. Moreover, it alters the stability condition of the unique steady state as well; namely, the steady state may display damped oscillations and admit periodic orbits.

Suggested Citation

  • Yangru Wu & Junxi Zhang, 2003. "Uniqueness and Stability of Equilibria in a Model with Endogenous Markups and Labor Supply," Annals of Economics and Finance, Society for AEF, vol. 4(1), pages 177-191, May.
    • Handle: RePEc:cuf:journl:y:2003:v:4:i:1:p:177-191
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    References listed on IDEAS

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    Cited by:

    1. Ali Abcha, 2014. "Imperfect competition, government spending and estimated markup," Working Papers hal-04141357, HAL.
    2. Ali Abcha, 2014. "Imperfect competition, government spending and estimated markup," EconomiX Working Papers 2014-11, University of Paris Nanterre, EconomiX.

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    More about this item

    Keywords

    Multiple equilibria; Endogenous markups; Endogenous labor supply;
    All these keywords.

    JEL classification:

    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium

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