Endogenous skill cycles

Francesco Busato () and Enrico Marchetti

Research in Economics, 2010, vol. 64, issue 3, 175-185

Abstract: This paper explores the ability of a class of one-sector models to generate endogenous skills cycles. Skills cycles are here defined as endogenous fluctuations of the composition of equilibrium allocation of labor services. We consider a one sector economy in which there exist one type of capital stock and a finite number of different labor services, which are assumed to be heterogeneous along the skill/productivity dimension. We apply the Hopf bifurcation theorem and provide necessary conditions on the model's parameters for having a closed orbit as the economy's stable set. We also develop a numerical example (based on the United States economy) showing how this closed orbit can appear under reasonable parameter values.

Keywords: Business; fluctuations; Cycles; Skills (search for similar items in EconPapers)
Date: 2010
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Working Paper: Endogenous Skill Cycles (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:reecon:v:64:y:2010:i:3:p:175-185

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