Factors substitutability, heterogeneity and endogenous fluctuations in a finance constrained economy

Jean-Paul Barinci ()
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Jean-Paul Barinci: EUREQua - UniversitÊ de Paris 1, 106-112, Bd de l'HÆpital, 75647 Paris Cedex 13, FRANCE

Economic Theory, 2001, vol. 17, issue 1, 195 pages

Abstract: This paper examines the local properties of perfect foresight equilibrium of a finance constrained economy featuring two classes of infinitely-lived agents with heterogeneous general preferences. It is primarily concerned with the conceivability of endogenous fluctuations for large plausible capital-labor elasticities of substitution. It is notably shown that heterogeneity in preferences allows Hopf cycles to be entirely consistent with a wide range of elasticities of substitution including the unitary one (Cobb-Douglas specifications).

Keywords: Heterogeneity; Factors substitutability; Local bifurcations and endogenous fluctuations. (search for similar items in EconPapers)
JEL-codes: C61 E32 (search for similar items in EconPapers)
Date: 2000-11-14
Note: Received: April 23, 1999; revised version: January 24, 2000
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