Local and global bifurcations in an economic growth model with endogenous labour supply and multiplicative external habits.
This paper analyses the mathematical properties of an economic growth model with overlapping generations, endogenous labour supply, and multiplicative external habits. The dynamics of the economy is characterised by a two-dimensional map describing the time evolution of capital and labour supply. We show that if the relative importance of external habits in the utility function is sufficiently high, multiple (determinate or indeterminate) fixed points and poverty traps can exist. In addition, periodic or quasiperiodic behaviour and/or coexistence of attractors may occur.
Department of Law, University of Genoa, Via Balbi, 30/19, I-16126 Genoa (GE), Italy.
Luca
L
Gori
Department of Economics and Management, University of Pisa, Via Cosimo Ridolfi, 10, I-56124 Pisa (PI), Italy.
Mauro
M
Sodini
D017059:Models, Econometric