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Indeterminacy with environmental and labor dynamics

Indeterminacy with environmental and labor dynamics
Indeterminacy with environmental and labor dynamics
We study the joint dynamics of labor reallocation and environmental change when workers have rational expectations and incur migration costs. We emphasize the relation between parameter values and the area of state space in which indeterminacy of equilibria can occur. Unlike the one-dimensional model in which the wage differential adjusts instantaneously, here the measure of the region of indeterminacy is not monotonic in the cost of adjustment.
indeterminacy, factor reallocation, environment, costs of adjustment
0954-349X
Karp, L.S.
261a5c1b-3f91-478a-bf2e-62793dba16fb
Thierry, P.
4d1d5b50-7306-485c-8e3b-a4d4d201def6
Karp, L.S.
261a5c1b-3f91-478a-bf2e-62793dba16fb
Thierry, P.
4d1d5b50-7306-485c-8e3b-a4d4d201def6

Karp, L.S. and Thierry, P. (2006) Indeterminacy with environmental and labor dynamics. Structural Change and Economic Dynamics. (doi:10.1016/j.strueco.2005.11.004).

Record type: Article

Abstract

We study the joint dynamics of labor reallocation and environmental change when workers have rational expectations and incur migration costs. We emphasize the relation between parameter values and the area of state space in which indeterminacy of equilibria can occur. Unlike the one-dimensional model in which the wage differential adjusts instantaneously, here the measure of the region of indeterminacy is not monotonic in the cost of adjustment.

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More information

Published date: 24 February 2006
Keywords: indeterminacy, factor reallocation, environment, costs of adjustment

Identifiers

Local EPrints ID: 39704
URI: http://eprints.soton.ac.uk/id/eprint/39704
ISSN: 0954-349X
PURE UUID: 30466abd-9ceb-4148-b5d8-a6b170206211

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Date deposited: 29 Jun 2006
Last modified: 15 Mar 2024 08:16

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Contributors

Author: L.S. Karp
Author: P. Thierry

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