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Please use this identifier to cite or link to this item: http://hdl.handle.net/10400.5/2316

Title: Non-Smooth Dynamics and Multiple Equilibria in a Cournt-Ramsey Model with Endogenous Markups
Authors: Brito, Paulo
Costa, Luís F.
Dixon, HUW
Keywords: Endogenous markups
Non-smooth dynamics
Discontinuity induced bifurcations
Heteroclinic orbits
Issue Date: 2010
Publisher: ISEG - Departamento de Economia
Citation: Brito, Paulo, Luís Costa e HUW Dixon. 2010. "Non-Smooth Dynamics and Multiple Equilibria in a Cournt-Ramsey Model with Endogenous Markups". Instituto Superior de Economia e Gestão - DE Working papers nº 14-2010/DE/UECE
Series/Report no.: DE Working papers;nº 14-2010/DE/UECE
Abstract: We consider a Ramsey model with a continuum of Cournotian industries where free entry generates an endogenous markup. The model produces two different regimes, monopoly and oligopoly, resulting in non-smooth dynamics. We analyze the global dynamics of the model, demonstrating the model may exhibit heteroclinic orbits connecting multiple equi¬libria. Small transitory changes in parameters can lead to large permanent effects and there can be a Rostovian poverty trap separating a low-capital and high-markup equilibrium from a high-capital low-markup equilibrium. The paper applies recent results from applied math¬ematics for non-smooth dynamic systems.
URI: http://hdl.handle.net/10400.5/2316
ISSN: 0874-4548
Publisher version: http://aquila2.iseg.utl.pt/aquila/getFile.do?method=getFile&fileId=146664
Appears in Collections:UECE - Documentos de Trabalho / UECE - Working Papers
DE - Documentos de trabalho / Working Papers

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