Tindeterminacy and Cycles in Two-Sector Discrete-Time Models.

We consider a discrete-time two-sector Cobb-Douglas economy with positive sector specific external effects. We show that indetermincay of steady states and cycles can easily arise with constant or decreasing social returns to scale, and very small market imperfections. This is in sharp contrast with most of the contribution in the literature in which increasing social returns are required to generate indeterminacy.

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Year of publication:	1999
Authors:	Benhabib, J. ; Nishimura, K. ; Venditti, A.
Institutions:	Groupement de Recherche en Économie Quantitative d'Aix-Marseille (GREQAM), Aix-Marseille School of Economics (AMSE)
Subject:	MATHEMATICAL ANALYSIS \| BUSINESS CYCLES \| ECONOMIC GROWTH

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Series:	G.R.E.Q.A.M..
Type of publication:	Book / Working Paper
Notes:	29 pages
Classification:	C62 - Existence and Stability Conditions of Equilibrium ; E32 - Business Fluctuations; Cycles ; O41 - One, Two, and Multisector Growth Models
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005256035