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Venditti

Publications

Indeterminacy in dynamic models: When Diamond meets RamseyJournal articleCarine Nourry, Alain Venditti and Teresa Lloyd-Braga, Journal of Economic Theory, Volume 134, Issue 1, pp. 513-536, 2007

In this paper, we consider an aggregate overlapping generations model with endogenous labour, consumption in both periods of life, homothetic preferences and productive external effects coming from the average capital and labour. We show that under realistic calibrations of the parameters, in particular a large enough share of first period consumption over the wage income, local indeterminacy of equilibria cannot occur with capital externalities alone but that it can occur when there are only, however small, labour externalities. More precisely, under gross substitutability, the existence of multiple equilibria requires a large enough elasticity of capital-labour substitution and a large enough elasticity of the labour supply. We also show that if labour externalities are slightly stronger and the elasticity of labour supply is larger, local indeterminacy occurs in a Cobb-Douglas economy. Finally, we show that, as a consequence of our restriction on first period consumption, a locally indeterminate steady state is generically characterized by an under-accumulation of capital. It follows therefore that while agents live over a finite number of periods, the conditions for the existence of locally indeterminate equilibria are very similar to those obtained within infinite horizon models and that from this point of view, Diamond meets Ramsey.
Wealth inequality, preference heterogeneity and macroeconomic volatility in two-sector economiesJournal articleChristian Ghiglino and Alain Venditti, Journal of Economic Theory, Volume 135, Issue 1, pp. 414-441, 2007

No abstract is available for this item.
Instability and fluctuations in intertemporal equilibrium models: PresentationJournal articleAlain Venditti, Cuong Le Van, Tapan Mitra and Kazuo Nishimura, Journal of Mathematical Economics, Volume 43, Issue 3-4, pp. 231-235, 2007

No abstract is available for this item.
Indeterminacy in discrete-time infinite-horizon models with non-linear utility and endogenous laborJournal articleAlain Venditti and Kazuo Nishimura, Journal of Mathematical Economics, Volume 43, Issue 3-4, pp. 446-476, 2007

No abstract is available for this item.
Sunspot Fluctuations in Two-sector Economies with Heterogeneous AgentsJournal articleStefano Bosi, Francesco Magris and Alain Venditti, Economic Theory, Volume 33, Issue 2, pp. 311-331, 2007

No abstract is available for this item.
Intertemporal substitution in consumption, labor supply elasticity and sunspot fluctuations in continuous-time modelsJournal articleJean-Philippe Garnier, Kazuo Nishimura and Alain Venditti, International Journal of Economic Theory, Volume 3, Issue 4, pp. 235-259, 2007

The aim of his paper is to discuss the roles of the elasticity of intertemporal substitution in consumption and the elasticity of the labor supply on the local determinacy properties of the steady state in a two-sector economy with CES technologies and sector-specific externalities. Our main results provide necessary and sufficient conditions for local indeterminacy. First we show that the consumption good sector needs to be capital intensive at the private level and labor intensive at the social level. Second, we prove that under this capital intensity configuration, the existence of sunspot fluctuations is obtained if and only if the elasticity of intertemporal substitution in consumption is large enough but the elasticity of the labor supply is low enough. In particular, we will show on the one hand that when the labor supply is infinitely elastic, the steady state is always saddle-point stable, and on the other hand that when the elasticity of intertemporal substitution in consumption is infinite, labor does not have any influence on the local stability properties of the equilibrium path.
Endogenous Fluctuations in Two-Sector Models: Role of PreferencesJournal articleKazuo Nishimura, Harutaka Takahashi and Alain Venditti, Journal of Optimization Theory and Applications, Volume 128, Issue 2, pp. 309-331, 2006

We consider a discrete-time two-sector CES (constant elasticity of substitution) economy with sector specific external effects and nonlinear preferences. Our goal is to examine carefully the influence of the utility curvature on the occurrence of multiple equilibria. We show that local indeterminacy depends on an interplay between factor substitutability and the elasticity of intertemporal substitution in consumption. Moreover, considering that, when the external effects are set equal to zero, we get a two-sector optimal growth model, we study also the role of the utility curvature on the occurrence of competitive equilibrium cycles. We show that persistent endogenous fluctuations and macroeconomic volatility require a strong enough elasticity of intertemporal substitution in consumption.
Indeterminacy with small externalities: The role of non-separable preferencesJournal articleTeresa Lloyd-Braga, Carine Nourry and Alain Venditti, International Journal of Economic Theory, Volume 2, Issue 3-4, pp. 217-239, 2006

In this paper we consider a Ramsey one-sector model with non-separable homothetic preferences, endogenous labour and productive external effects arising from average capital and labour. We show that indeterminacy cannot arise when there are only capital externalities but that it does when there are only labour external effects. We prove that sunspot fluctuations are fully consistent with small market imperfections and realistic calibrations for the elasticity of capital-labour substitution (including the Cobb-Douglas specification) provided the elasticity of intertemporal substitution in consumption and the elasticity of the labour supply are large enough.
Endogenous Fluctuations In Two-Country ModelsJournal articleKazuo Nishimura, Alain Venditti and Makoto Yano, The Japanese Economic Review, Volume 57, Issue 4, pp. 516-532, 2006

No abstract is available for this item.
Overlapping Generations Model with Endogenous Labor Supply: General FormulationJournal articleCarine Nourry and Alain Venditti, Journal of Optimization Theory and Applications, Volume 128, Issue 2, pp. 355-377, 2006

This paper develops a one-sector overlapping generations model with endogenous labor supply and nonseparable preferences. It demonstrates that local indeterminacy arises easily under gross substitutability as soon as there exist multiple steady states. We show also that, depending on whether leisure and second-period consumption are gross substitutes, local indeterminacy holds for very different parameter configurations. If gross substitutability is satisfied, the existence of multiple equilibrium paths requires the share of capital in the total income to be strong enough with respect to the elasticity of capital-labor substitution. On the other hand, if gross substitutability is violated, local indeterminacy necessitates the share of capital in the total income to be weak enough with respect to the elasticity of capital-labor substitution.