Switch Points and Normal Forms for Bifurcations
32 Pages Posted: 3 Aug 2017
Date Written: July 31, 2017
The choice of technique can be analyzed, in a circulating-capital model of prices of production, by constructing the wage frontier. Switch points arise when more than one technique is cost-minimizing for a specified rate of profits. This article defines four normal forms for structural bifurcations, in which the number and sequence of switch points varies with a variation in one model parameter, such as a coefficient of production. The ’perversity’ of switch points that appear on and disappear from the wage frontier is analyzed. The conjecture is made that no other normal forms exist of co-dimension one.
Keywords: Bifurcation Analysis, Choice of Technique, Reswitching, Capital-Reversing
JEL Classification: B24, D24
Suggested Citation: Suggested Citation