Sunspot Fluctuations in Two-Sector Economies with Heterogeneous Agents

Stefano Bosi (), Francesco Magris and Alain Venditti
Additional contact information
Stefano Bosi: EPEE, Université d’Evry

No 03-12, Documents de recherche from Centre d'Études des Politiques Économiques (EPEE), Université d'Evry Val d'Essonne

Abstract: We study a two-sector model with heterogeneous agents and borrowing constraint on labor income. We show that the relative capital intensity difference across sectors is crucial for the conditions required to get indeterminacy and endogenous fluctuations. When the consumption sector is significantly capital intensive, indeterminacy occurs with elasticities of capital-labor substitution which are in accordance with recent empirical estimates and with a large set of values for the elasticity of the offer curve. When the investment good is capital intensive, indeterminacy requires a quite low elasticity of substitution in the consumption good sector while this elasticity may remain close to unity for the investment good. In both cases, persistent endogenous cycles may also appear through flip or Hopf bifurcations.

Keywords: Heterogeneous agents; borrowing constraint; two-sector model; indeterminacy (search for similar items in EconPapers)
JEL-codes: C61 E32 E41 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2003
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.univ-evry.fr/fileadmin/mediatheque/uev ... s/Epee/wp/03-12R.pdf (application/pdf)

Related works:
Journal Article: Sunspot Fluctuations in Two-sector Economies with Heterogeneous Agents (2007)
Working Paper: Sunspot Fluctuations in Two-sector Economies with Heterogeneous Agents (2007)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eve:wpaper:03-12

Access Statistics for this paper

More papers in Documents de recherche from Centre d'Études des Politiques Économiques (EPEE), Université d'Evry Val d'Essonne Contact information at EDIRC.
Bibliographic data for series maintained by Samuel Nosel ().