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Multiple Interior Steady States in the Ramsey Model with Elastic Labor Supply

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  • Takashi Kamihigashi

    (Research Institute for Economics & Business Administration (RIEB), Kobe University, Japan)

Abstract

In this paper we show that multiple interior steady states are possible in the Ramsey model with elastic labor supply. In particular we establish the following three results: (i) for any discount factor and production function, there is a utility function such that a continuum of interior steady states exist; (ii) the number of interior steady states can also be any finite number; and (iii) for any discount factor and production function, there is a utility function such that there is no interior steady state. Some numerical examples are provided.

Suggested Citation

  • Takashi Kamihigashi, 2014. "Multiple Interior Steady States in the Ramsey Model with Elastic Labor Supply," Discussion Paper Series DP2014-31, Research Institute for Economics & Business Administration, Kobe University.
    • Handle: RePEc:kob:dpaper:dp2014-31
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    File URL: https://www.rieb.kobe-u.ac.jp/academic/ra/dp/English/DP2014-31.pdf
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    Cited by:

    1. Iwasa, Kazumichi & Sorger, Gerhard, 2018. "Periodic solutions of the one-sector growth model: The role of income effects," Journal of Mathematical Economics, Elsevier, vol. 78(C), pages 59-63.
    2. Gerhard Sorger, 2018. "Cycles and chaos in the one-sector growth model with elastic labor supply," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 65(1), pages 55-77, January.
    3. Takashi Kamihigashi, 2017. "Regime-Switching Sunspot Equilibria in a One-Sector Growth Model with Aggregate Decreasing Returns and Small Externalities," Studies in Economic Theory, in: Kazuo Nishimura & Alain Venditti & Nicholas C. Yannelis (ed.), Sunspots and Non-Linear Dynamics, chapter 0, pages 125-146, Springer.
    4. Goenka, Aditya & Nguyen, Manh-Hung, 2020. "General existence of competitive equilibrium in the growth model with an endogenous labor–leisure choice," Journal of Mathematical Economics, Elsevier, vol. 91(C), pages 90-98.
    5. Becker, Robert A. & Borissov, Kirill & Dubey, Ram Sewak, 2015. "Ramsey equilibrium with liberal borrowing," Journal of Mathematical Economics, Elsevier, vol. 61(C), pages 296-304.
    6. Becker, Robert A. & Borissov, Kirill & Dubey, Ram Sewak, 2015. "Ramsey equilibrium with liberal borrowing," Journal of Mathematical Economics, Elsevier, vol. 61(C), pages 296-304.
    7. Gerhard Sorger, 2018. "Cycles and chaos in the one-sector growth model with elastic labor supply," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 65(1), pages 55-77, January.

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    More about this item

    Keywords

    Multiple steady states; Ramsey model; Elastic labor supply; Neoclassical growth;
    All these keywords.

    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium
    • E13 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Neoclassical
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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