Bifurcation Analysis Applied to Structural Economic Dynamics with a Choice of Technique

Variation of Switch Points with Technical Progress in Two Industries

I have a new working paper - basically an update of one I have previously described.

Abstract: This article illustrates the application of bifurcation analysis to structural economic dynamics with a choice of technique. A numerical example of the Samuelson-Garegnani model is presented in which technical progress is introduced. Examples of temporal paths through the parameter space illustrate variations of the wage frontier. A single technique is initially uniquely cost-minimizing for all feasible rates of profits. Eventually, the technique for which coefficients of production decrease at the fastest rate is always cost-minimizing. This example illustrates possible variations in the existence of Sraffa effects, which arise during the transition between these positions.