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Persistent fluctuations in a dual model with frictions: the role of delays. (English) Zbl 1334.91048

Summary: This article studies the dynamics in a simple dual model where agents may shift from the traditional sector to the manufacturing one. We show that a delay between the exit from the traditional sector and the possibility to be employed in the manufacturing one is a source of endogenous fluctuations. In particular, by choosing time delay as the bifurcation parameter, it is proved that the system may lose stability and a supercritical Hopf bifurcation occurs when time delay passes through a critical value.

MSC:

91B55 Economic dynamics
37N40 Dynamical systems in optimization and economics
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