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
Karp, L.S.
261a5c1b-3f91-478a-bf2e-62793dba16fb
Thierry, P.
4d1d5b50-7306-485c-8e3b-a4d4d201def6
24 February 2006
Karp, L.S.
261a5c1b-3f91-478a-bf2e-62793dba16fb
Thierry, P.
4d1d5b50-7306-485c-8e3b-a4d4d201def6
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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Published date: 24 February 2006
Keywords:
indeterminacy, factor reallocation, environment, costs of adjustment
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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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Author:
L.S. Karp
Author:
P. Thierry
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