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Endogenous Market Structure, Occupational Choice, and Growth Cycles

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  • Maria José Gil-Moltó
  • Dimitrios Varvarigos

Abstract

We model an industry that supplies intermediate goods in a growing economy. Agents can choose whether to provide labour or to become firm owners and compete in the industry. The idea that entry is determined through occupational choice has major implications for the economy’s intrinsic dynamics. Particularly, the results show that economic dynamics are governed by endogenous volatility in the determination of both the number of industry entrants and in the growth rate of output. Consequently, we argue that occupational choice and the structural characteristics of the endogenous market structure can act as both the impulse source and the propagation mechanism of economic fluctuations.

Suggested Citation

  • Maria José Gil-Moltó & Dimitrios Varvarigos, 2013. "Endogenous Market Structure, Occupational Choice, and Growth Cycles," Discussion Papers in Economics 13/05, Division of Economics, School of Business, University of Leicester.
  • Handle: RePEc:lec:leecon:13/05
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    References listed on IDEAS

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    Cited by:

    1. David Urbano & Sebastian Aparicio & David Audretsch, 2019. "Twenty-five years of research on institutions, entrepreneurship, and economic growth: what has been learned?," Small Business Economics, Springer, vol. 53(1), pages 21-49, June.
    2. Dimitrios Varvarigos, 2017. "Endogenous cycles and human capital," Journal of Economics, Springer, vol. 120(1), pages 31-45, January.
    3. Vera Ivanova & Philip Ushchev, 2019. "Product Differentiation, Competitive Toughness, and Intertemporal Substitution," Scandinavian Journal of Economics, Wiley Blackwell, vol. 121(3), pages 1244-1269, July.

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    More about this item

    Keywords

    Overlapping generations; Endogenous cycles; Firms’ entry; Industry Dynamics;
    All these keywords.

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure

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