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Asset bubble and endogenous labor supply: A clarification

Kathia Bahloul Zekkari and Thomas Seegmuller

Economics Letters, 2020, vol. 196, issue C

Abstract: This paper analyzes the link between asset bubbles, endogenous labor and capital. First, we explicitly and theoretically derive the conditions to have a crowding-in effect of the bubble, i.e. higher levels of capital and labor. Second, the utility function we consider shows that this result does not require an arbitrarily high elasticity of intertemporal substitution in consumption.

Keywords: Asset bubbles; Crowding-in effect; Endogenous labor; Overlapping generations (search for similar items in EconPapers)
JEL-codes: E22 E44 J22 (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:196:y:2020:i:c:s0165176520303256

DOI: 10.1016/j.econlet.2020.109537

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