We propose a model of business cycles for an economy that is characterized by involuntary unemployment and being dependent on energy imports. The presence of both factors increases aggregate volatility in a well-defined way: even in the absence of increasing returns to scale or high labor supply...

In this paper a two-sector growth model allowing indeterminacy to occur at relatively mild degrees of increasing returns is developed. It is shown that these economies of scale need only be present in one sector of the economy (investment). This feature of the model, therefore, builds on...

This paper constructs a small open economy version of the two sector Benhabib-Farmer (1996) indeterminacy model. It can be shown that sunspot equilibria arise at significantly lower magnitude of increasing returns to scale than in the original dosed economy model. Furthermore, if a mix of...