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

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.

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Year of publication:	2003
Authors:	Wu, Yangru ; Zhang, Junxi
Published in:	Annals of Economics and Finance. - China Economics and Management Academy, ISSN 1529-7373. - Vol. 4.2003, 1, 10, p. 177-191
Publisher:	China Economics and Management Academy
Subject:	Multiple equilibria \| Endogenous markups \| Endogenous labor supply

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Extent:	application/pdf
Type of publication:	Article
Language:	English
Classification:	O40 - Economic Growth and Aggregate Productivity. General ; C62 - Existence and Stability Conditions of Equilibrium
Source:	RePEc - Research Papers in Economics

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