Endogenous Working Hours, Overlapping Generations and Balanced Neoclassical Growth

Irmen, Andreas

Reference : Endogenous Working Hours, Overlapping Generations and Balanced Neoclassical Growth


	Document type :	E-prints/Working papers : First made available on ORBilu
	Discipline(s) :	Business & economic sciences : Macroeconomics & monetary economics
	Focus Areas :	Sustainable Development
	To cite this reference:	http://hdl.handle.net/10993/55683

Title :	Endogenous Working Hours, Overlapping Generations and Balanced Neoclassical Growth
Language :	English
Author, co-author :	Irmen, Andreas [University of Luxembourg > Faculty of Law, Economics and Finance (FDEF) > Department of Economics and Management (DEM) >]
Publication date :	4-Jun-2023
Publisher :	DEM, University of Luxembourg
Peer reviewed :	No
City :	Luxembourg
Country :	Luxembourg
Keywords :	[en] Technological Change ; Comparative Economic Development ; Endogenous Labor Supply ; Neoclassical Endogenous Growth ; OLG-model
Abstract :	[en] A balanced growth path that accounts for a decline in hours worked per worker approximates the evolution of today’s industrialized countries since 1870. This stylized fact is explained in an OLG-model featuring two-period lived individuals equipped with per-period utility functions of the generalized loglog type proposed by Boppart and Krusell (2020) and a neoclassical production sector. Technological progress drives real wages up and expands the amount of consumption goods. The value of leisure increases, and the supply of hours worked declines. Technological progress moves a poor economy out of a regime with low wages and an inelastic supply of hours worked into a regime with high wages and a declining supply of hours worked. The balanced growth path is unique and stable. In the high wage regime, the equilibrium difference equation is available in closed form. A balanced growth path with declining hours worked may also be obtained with endogenous technological progress as in Romer (1986).
Funders :	FNR Luxembourg
Name of the research project :	Competitive Growth Theory - CGT
Target :	Researchers
Permalink :	http://hdl.handle.net/10993/55683
FnR project :	FnR ; FNR11591926 > Andreas Irmen > CGT > Competitive Growth Theory > 01/03/2018 > 30/08/2018 > 2017

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