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Indeed, a sufficiently strong wagedifferential leads to the occurrence of cycles of period 2 and local indeterminacy.
At this stage, we can remark that the wagedifferential is an increasing function of the parameter e1 at the steady state.
In particular, we show that endogenous fluctuations can occur only if the wagedifferential is sufficiently strong.
Most of these remarks allow us to study the influence of the wagedifferential on the occurrence of endogenous fluctuations.
The existence of trade unions and other institutional factors that increased this wagedifferential were recognized.
We study the influence of wagedifferential on the emergence of endogenous fluctuations.
Then, the skilled worker will not shirk for a weaker wagedifferential.
In what follows, we first present why a sufficiently high wagedifferential promotes the occurrence of indeterminacy and endogenous cycles.
The wagedifferential between non-profit institutions and corporations: getting more by paying less?
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