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ENDOGENOUS MARKET STRUCTURE, OCCUPATIONAL CHOICE, AND GROWTH CYCLES

Published online by Cambridge University Press:  12 May 2014

Dimitrios Varvarigos and
Maria José Gil-Moltó
Dimitrios Varvarigos*
Affiliation:
University of Leicester
Maria José Gil-Moltó
Affiliation:
University of Sheffield
*
Address correspondence to: Dimitrios Varvarigos, Department of Economics, University of Leicester, Astley Clarke Building, University Road, Leicester LE1 7RH, UK; e-mail: dv33@le.ac.uk.
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Abstract

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We model an industry that supplies intermediate goods in a growing economy. Agents can choose whether to provide labor 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 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.

Keywords

Overlapping GenerationsEndogenous CyclesMarket EntryIndustry Dynamics

Information

Type
Articles
Information
Macroeconomic Dynamics , Volume 20 , Issue 1 , January 2016, pp. 70 - 94
Copyright
Copyright © Cambridge University Press 2014 

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