Nonlinear dynamics in an OLG growth model with young and old age labour supply: the role of public health expenditure

Gori, Luca and Sodini, Mauro (2011): Nonlinear dynamics in an OLG growth model with young and old age labour supply: the role of public health expenditure.

Abstract

This paper analyses the dynamics of a two-dimensional overlapping generations model with young and old age labour supply. It is shown that the public provision of health investments, which, in turn, affects the demand for material consumption, may represent a source of local indeterminacy, nonlinear dynamics and multiplicity of equilibria. Furthermore, global indeterminacy may also occur because of the co-existence of two attractors with tangled basins of attraction.

• Item Type: MPRA Paper
• Language: English
• Keywords: Chaos; Labour supply; OLG model; Public health expenditure
• Subjects: C - Mathematical and Quantitative Methods > C6 - Mathematical Methods ; Programming Models ; Mathematical and Simulation Modeling > C68 - Computable General Equilibrium Models; O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O41 - One, Two, and Multisector Growth Models; I - Health, Education, and Welfare > I1 - Health > I18 - Government Policy ; Regulation ; Public Health; J - Labor and Demographic Economics > J2 - Demand and Supply of Labor > J22 - Time Allocation and Labor Supply; C - Mathematical and Quantitative Methods > C6 - Mathematical Methods ; Programming Models ; Mathematical and Simulation Modeling > C62 - Existence and Stability Conditions of Equilibrium

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