Gomes, Orlando (2007): When leisure becomes excessive: a bifurcation result in endogenous growth theory.
Download (60Kb) | Preview
The traditional assumption concerning endogenous labor supply in models of economic growth is that utility increases with leisure, independently of the specific time allocation of the representative agent observed at a given moment. In this note, we explore the consequences, over dynamic stability, of assuming that the agent dislikes having free time in excess, i.e., of considering that the marginal utility of leisure is not necessarily positive for every value of the leisure share (in particular, for high values of this share). By including this assumption in a typical AK endogenous growth model, we find that the system will rest, independently of parameter values, on a bifurcation line.
|Item Type:||MPRA Paper|
|Institution:||Escola Superior de Comunicação Social - Instituto Politécnico de Lisboa|
|Original Title:||When leisure becomes excessive: a bifurcation result in endogenous growth theory|
|Keywords:||Labor-leisure choice; Leisure utility; Endogenous growth; Dynamic analysis|
|Subjects:||C - Mathematical and Quantitative Methods > C6 - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling > C61 - Optimization Techniques; Programming Models; Dynamic Analysis
O - Economic Development, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O41 - One, Two, and Multisector Growth Models
J - Labor and Demographic Economics > J2 - Demand and Supply of Labor > J22 - Time Allocation and Labor Supply
|Depositing User:||Orlando Gomes|
|Date Deposited:||09. Jun 2007|
|Last Modified:||16. Feb 2013 07:16|
Blanchard, O. (2004). “The Economic Future of Europe.” Journal of Economic Perspectives, vol. 18, pp. 3-26. Duranton, G. (2001). “Endogenous Labor Supply, Growth and Overlapping Generations.” Journal of Economic Behaviour and Organization, vol. 44, pp. 295-314. Glaeser, E., B. Sacerdote and J. Scheinkman (2003) “The Social Multiplier.” Journal of the European Economic Association, vol. 1, pp. 345-353. Ortigueira, S. (2000). ”A Dynamic Analysis of an Endogenous Growth Model with Leisure.” Economic Theory, vol. 16, pp. 43-62. Stokey, N. L. and S. Rebelo (1995). ”Growth Effects of Flat-Rate Taxes.” Journal of Political Economy, vol. 103, pp. 519-550.