Business cycle fluctuations and learning-by-doing externalities in a one-sector model

d’Albis, Hippolyte, Emmanuelle Augeraud-Véron and Alain Venditti
Authors registered in the RePEc Author Service: Hippolyte d'Albis

Journal of Mathematical Economics, 2012, vol. 48, issue 5, 295-308

Abstract: We consider a one-sector Ramsey-type growth model with inelastic labor and learning-by-doing externalities based on cumulative gross investment (cumulative production of capital goods), which is assumed, in accordance with Arrow (1962), to be a better index of experience than the average capital stock. We prove that a slight memory effect characterizing the learning-by-doing process is enough to generate business cycle fluctuations through a Hopf bifurcation leading to stable periodic orbits. This is obtained for reasonable parameter values, notably for both the amount of externalities and the elasticity of intertemporal substitution. Hence, contrary to all the results available in the literature on aggregate models, we show that endogenous fluctuations are compatible with a low (in actual fact, zero) wage elasticity of the labor supply.

Keywords: One-sector infinite-horizon model; Learning-by-doing externalities; Inelastic labor; Business cycle fluctuations; Hopf bifurcation; Local determinacy (search for similar items in EconPapers)
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (22)

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Related works:
Working Paper: Business Cycle Fluctuations and Learning-by-doing Externalities in a One-sector Model (2012)
Working Paper: Business cycle fluctuations and learning-by-doing externalities in a one-sector model (2012)
Working Paper: Business Cycle Fluctuations and Learning-by-doing Externalities in a One-sector Model (2012)
Working Paper: Business cycle fluctuations and learning-by-doing externalities in a one-sector model (2012)
Working Paper: Business Cycle Fluctuations and Learning-by-doing Externalities in a One-sector Model (2012)
Working Paper: Business cycle fluctuations and learning-by-doing externalities in a one-sector model (2012)
Working Paper: Business cycle fluctuations and learning-by-doing externalities in a one-sector model (2010)
Working Paper: Business cycle fluctuations and learning-by-doing externalities in a one-sector model (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:mateco:v:48:y:2012:i:5:p:295-308

DOI: 10.1016/j.jmateco.2012.07.002

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