Business cycle fluctuations and learning-by-doing externalities in a one-sector model

Hippolyte d'Albis, Emmanuelle Augeraud-Véron () and Alain Venditti
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Emmanuelle Augeraud-Véron: MIA - Université de la Rochelle
Authors registered in the RePEc Author Service: Emmanuelle Augeraud-Véron

Documents de travail du Centre d'Economie de la Sorbonne from Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne

Abstract: We consider a one-sector Ramsey-type growth model with inelastic labor and learning-by-doing externalities based on cumulative gross investment (cumulative production of capital goods), which is assumed, in accordance with Arrow [4], to be a better index of experience than the average capital stock. We prove that a slight memory effect characterizing the learning-by-doing process is enough to generate business cycle fluctuations through a Hopf bifurcation leading to stable periodic orbits. This is obtained for reasonable parameter values, notably for both the amount of externalities and the elasticity of intertemporal substitution. Hence, contrary to all the results available in the literature on aggregate models, we show that endogenous fluctuations are compatible with a low (in actual fact, zero) wage elasticity of the labor supply

Keywords: One-sector infinite-horizon model; learning-by-doing externalities; inelastic labor; business cycle fluctuations; Hopf bifurcation; local determinacy (search for similar items in EconPapers)
JEL-codes: C62 E32 O41 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2012-03
New Economics Papers: this item is included in nep-dge
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (26)

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http://mse.univ-paris1.fr/pub/mse/CES2012/12026.pdf (application/pdf)

Related works:
Journal Article: Business cycle fluctuations and learning-by-doing externalities in a one-sector model (2012)
Working Paper: Business Cycle Fluctuations and Learning-by-doing Externalities in a One-sector Model (2012)
Working Paper: Business cycle fluctuations and learning-by-doing externalities in a one-sector model (2012)
Working Paper: Business Cycle Fluctuations and Learning-by-doing Externalities in a One-sector Model (2012)
Working Paper: Business cycle fluctuations and learning-by-doing externalities in a one-sector model (2012)
Working Paper: Business Cycle Fluctuations and Learning-by-doing Externalities in a One-sector Model (2012)
Working Paper: Business cycle fluctuations and learning-by-doing externalities in a one-sector model (2010)
Working Paper: Business cycle fluctuations and learning-by-doing externalities in a one-sector model (2009)
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