Ghiglino, Christian; Olszak-Duquenne, Marielle (November 2002). The impact of heterogeneity on indeterminacy (Diskussionsschriften 02-13). Bern: Universität Bern Volkswirtschaftliches Institut
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The aim of the paper is to explore the link between agent’s heterogeneity and indeterminacy in a general equilibrium economy. The framework is provided by the two-sector growth model with technological externalities of Boldrin and Rustichini (1994) in which heterogeneous agents are introduced. We first show that the occurrence of indeterminacy depends on the distribution in labor endowments and in shares on initial capital among the agents as well as on preferences and technology. We find that the sign of the effect of heterogeneity on indeterminacy is not pinned down by the standard properties of preferences, a fact that might be surprising in view of some recent results (as in Herrendorf et al. (2000)). However, when risk aversion is a concave or a slightly convex function, then heterogeneity is a factor that opposes the external effects in generating indeterminacy.
Item Type: |
Working Paper |
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Division/Institute: |
03 Faculty of Business, Economics and Social Sciences > Department of Economics |
UniBE Contributor: |
Ghiglino, Christian |
Subjects: |
300 Social sciences, sociology & anthropology > 330 Economics |
Series: |
Diskussionsschriften |
Publisher: |
Universität Bern Volkswirtschaftliches Institut |
Language: |
English |
Submitter: |
Aline Lehnherr |
Date Deposited: |
11 Jun 2020 16:29 |
Last Modified: |
05 Dec 2022 15:38 |
JEL Classification: |
D30, D50, D90, O41 |
BORIS DOI: |
10.7892/boris.143993 |
URI: |
https://boris.unibe.ch/id/eprint/143993 |
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