Multiple equilibria in the Aghion–Howitt model

We show that the simple Aghion–Howitt model exhibits oscillatory indeterminacy in the process of creative destruction as firms undertaking new research do not internalize their effect on existing firms. A simple calibration shows that indeterminacy occurs for quite plausible parametrizations of the share of the intermediate good.

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Year of publication:	2014
Authors:	Benhabib, Jess
Published in:	Research in Economics. - Elsevier, ISSN 1090-9443. - Vol. 68.2014, 2, p. 112-116
Publisher:	Elsevier
Subject:	Endogenous growth \| Indeterminacy \| Quality ladder

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Type of publication:	Article
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10010777138