On the indeterminacy of equilibrium in an endogenous growth model with non-separable preferences

Ilaski Barañano () and Marta San Martín ()

Mathematical Social Sciences, 2020, vol. 108, issue C, 81-89

Abstract: This paper studies equilibrium indeterminacy in an extended version of the two-sector endogenous growth model by Mino (1999) by allowing alternative specifications for leisure. When utility depends on pure leisure, indeterminacy may only emerge if consumption and leisure are Edgeworth complements. We obtain the necessary and sufficient conditions for indeterminacy from the arbitrage condition on the two assets of the economy: consumption and human capital. When qualified leisure is considered, indeterminacy does not arise.

Keywords: Equilibrium indeterminacy; Preference structure; Endogenous growth (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:eee:matsoc:v:108:y:2020:i:c:p:81-89

DOI: 10.1016/j.mathsocsci.2020.10.001

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