Abstract This paper examines whether taxation is effective in eliminating sunspot fluctuations by considering two separate model economies by which indeterminacy occurs for empirically plausible specification of the model parameters. In the first model where production exhibits social increasing...

type="main" xml:id="ecot12053-abs-0001" xml:lang="en" <title type="main">Abstract</title> <p>This paper examines the causal effect that trade openness has on government size in small developing countries (SDCs). We use the construction of the trade cost variables based on Baltic Dry Index in primary goods as instruments of...</p>

This paper explains how indeterminacy in a one-sector model may arise due to externalities in the disutility of labor supply, which is termed as demand-side indeterminacy. This contrasts supply-side indeterminacy that is driven by externalities in the production function as exemplified by...