Abstract
This paper extends the Lucas-Prescott island economy to allow for finite lived agents and sector specific human capital. Unlike the Lucas-Prescott model in which workers who leave declining sectors find employment in expanding sectors, this models predicts that workers who leave declining sectors may simply become non-employed, whereas increased employment in expanding sectors is accomplished by increasing the rate at which new entrants enter the sector.
Original language | English (US) |
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Pages (from-to) | 89-105 |
Number of pages | 17 |
Journal | Review of Economic Dynamics |
Volume | 8 |
Issue number | 1 |
DOIs | |
State | Published - Jan 2005 |
Externally published | Yes |
All Science Journal Classification (ASJC) codes
- Economics and Econometrics