Occupational Choice and Dynamic Indeterminacy

Kazuo Mino, Koji Shimomura and Ping Wang

Review of Economic Dynamics, 2005, vol. 8, issue 1, 138-153

Abstract: This paper construct a two-sector model of two-period lived overlapping generations with endogenous occupational choice where ability-heterogeneous agents choose whether to become educated when young. We show that the steady-state equilibrium can be locally indeterminate even under linear preferences and constant-returns Cobb-Douglas production technologies, regardless of the factor-intensity rankings. Thus, endogenous occupational choice can result in dynamic indeterminacy without complicate preferences/technologies and without requiring the consumption-good production $more capital-intensive. (Copyright: Elsevier)

Keywords: occupational choice; overlapping generations; indeterminacy of equilibrium (search for similar items in EconPapers)
JEL-codes: E32 J24 O40 (search for similar items in EconPapers)
Date: 2005
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DOI: 10.1016/j.red.2004.10.001

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