Do firms reduce employment when their insiders (established, incumbent employees) claim higher wages? The conventional answer in the theoretical literature is that insider power has no influence on employment, provided that the newly hired employees (entrants) receive their reservation wages....

We studied the population dynamics of producers and parasites in a developing economy through the Lotka–Volterra model. Our baseline model found a cyclical equilibrium between these two groups of agents. When the equilibrium output is low, we propose that economy is in a poverty trap, such...