Growth and Labor Income Risk with Inelastic and Elastic Labor Supply

Christiane Clemens

Hannover Economic Papers (HEP) from Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät

Abstract: We discuss long-run growth in an economy which is subject to aggregate productivity shocks affecting all factors of production. We demonstrate that the presence of labor income risk unambiguously is an important determinant of long-run expected growth. The issue of dynamic inefficiency of the underlying allocation is related to the size of the risk premium on capital return. The paper also examines the effects distributive disturbances and elastic labor supply, the latter giving rise to the possibility of multiple equilibria.

Keywords: income risk; labor supply; endogenous growth (search for similar items in EconPapers)
JEL-codes: D8 D9 O4 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2004-10
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://diskussionspapiere.wiwi.uni-hannover.de/pdf_bib/dp-305.pdf (application/pdf)

Related works:
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:han:dpaper:dp-305

Access Statistics for this paper

More papers in Hannover Economic Papers (HEP) from Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät Contact information at EDIRC.
Bibliographic data for series maintained by Heidrich, Christian (heidrich@wiwi.uni-hannover.de).