Chen, Been-Lon; Hsu, Yu-Shan; Mino, Kazuo - In: Journal of Economics 109 (2013) 3, pp. 245-269
This paper investigates whether the external consumption habit can be a source of indeterminacy in a one-sector growth … substitution, we find that the model exhibits indeterminacy if the coefficient of the habit formation is sufficiently large that … allows for a substantial impact of current consumption on the habit. Indeterminacy arises even though the elasticity of the …