Competitive Equilibrium Cycles for Small Discounting in Discrete-Time Two-Sector Optimal Growth Models

Alain Venditti

Working Papers from HAL

Abstract: We study the existence of endogenous competitive equilibrium cycles under small discounting in a two-sector discrete-time optimal growth model. We provide precise concavity conditions on the indirect utility function leading to the existence of period-two cycles with a critical value for the discount factor that can be arbitrarily close to one. Contrary to the continuous-time case where the existence of periodic-cycles is obtained if the degree of concavity is close to zero, we show that in a discrete-time setting the driving condition does not require a close to zero degree of concavity but a symmetry of the indirect utility function's concavity properties with respect to its two arguments.

Keywords: small discounting; two-sector optimal growth model; strong and weak concavity; period-two cycles (search for similar items in EconPapers)
Date: 2018-11
New Economics Papers: this item is included in nep-mac and nep-upt
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Related works:
Journal Article: Competitive equilibrium cycles for small discounting in discrete-time two-sector optimal growth models (2019)
Working Paper: Competitive equilibrium cycles for small discounting in discrete-time two-sector optimal growth models (2019)
Working Paper: Competitive Equilibrium Cycles for Small Discounting in Discrete-Time Two-Sector Optimal Growth Models (2018)
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