Hours and effort variation in sunspot-based business cycle theory

Economics Bulletin, 2008, vol. 5, issue 12, pages 1-12

Abstract: This paper analyzes the role of variable work effort in inducing sunspot equilibria in real business cycle models. Not only is it demonstrated that variable workers’ work intensity reduces the degree of increasing returns that is needed to generate indeterminacy but it is also shown that this can be done without assuming a very elastic supply of labor.

Keywords: Indeterminacy; Variable Factor Inputs; Increasing Returns; Sunspots (search for similar items in EconPapers)
JEL-codes: E3 E0 (search for similar items in EconPapers)
Date: 2008-03-13
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