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Title: Non-separable utilities and aggregate instability
Author: Chen, Been‐Lo
Lee, Shun-Fa
Raurich, Xavier
Keywords: Regressió infinita
Externalitats (Economia)
Política salarial
Oferta i demanda
Infinite regress
Externalities (Economics)
Wage policy
Supply and demand
Issue Date: Jun-2020
Publisher: Wiley
Abstract: This paper studies an infinite‐horizon two‐sector growth model with sector‐specific externalities and preferences that are non‐separable between consumption and leisure. We find two main results. First, a larger income effect on the labor supply increases the possibility of macroeconomic instability. Second, a larger elasticity of the labor supply may increase or decrease the possibility of aggregate instability, depending on the intensity of the income effect.
Note: Versió postprint del document publicat a:
It is part of: International Journal of Economic Theory, 2020, vol. 16, num. 2, p. 222-237
Related resource:
ISSN: 1742-7355
Appears in Collections:Articles publicats en revistes (Economia)

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