Free labor mobility and indeterminacy in models of neoclassical growth

Neoclassical Models of Imperfectly Competitive Labor Markets

The scenario of perfect competition, as augmented by human capital theory, yields a large body of testable hypotheses concerning labor market outcomes. These hypotheses, overviewed in the first chapter of this volume, might all be understood as applications of three more fundamental implications of perfectly competitive equilibrium conditions: no unemployment or vacancies, the law of one wage, ...

Convergence in Neoclassical Vintage Capital Growth Models

Most growth models assume capital is homogeneous. This contradicts intuition and empirical evidence that the majority of technology is embodied in the capital stock. Classic papers from the late 1950’s and 1960’s show that non-optimization models display the same asymptotic growth rates whether technology is embodied (vintage capital) or disembodied. This paper uses new numerical optimization t...

Intergenerational Altruism and Neoclassical Growth Models

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Classical and Neoclassical Indeterminacy in One-shot versus Ongoing Equilibria

I analyze two connections between neoclassical and classical economics. First, I consider the indeterminacy that arises for both schools: in the neoclassical theories of overlapping generations and of factor pricing and in Sraffa’s price theory. Neoclassical indeterminacy occurs only in environments where relative prices can change through time; otherwise, determinacy obtains. Although these re...

Fiscal policy and indeterminacy in models of endogenous growth