It is shown that the discrete-time version of the neoclassical one-sector optimal growth model with endogenous labor supply and standard assumptions on technology and preferences admits periodic solutions of any period as well as chaotic solutions. Solutions with period 2 are possible for any time-preference factor between 0 and 1, whereas the existence of periodic solutions with other periods and the existence of chaotic solutions are only demonstrated by means of a specific example involving strong time-preference. The results are derived via constructive proofs that use Cobb-Douglas production functions.
| Original language | English |
|---|
| Number of pages | 21 |
|---|
| Publication status | Published - May 2015 |
|---|
| Series | Vienna Economics Papers |
|---|
| Number | No. 1505 |
|---|