Abstract
Over the last decade, a large number of papers have established the fact that locally indeterminate equilibria and sunspots fluctuations may arise in infinite-horizon growth models with external effects in production. These contributions also show that there exist significant differences between one-sector and two-sector models. As initially established by Benhabib and Farmer (1994), in one-sector models local indeterminacy requires some increasing returns based on externalities coming from capital and more importantly labor, a strongly elastic labor supply, and a large enough elasticity of intertemporal substitution in consumption which may however remain within plausible intervals.
Journal of Mathematical Economics 43, 446–476, 2007.
This paper benefited from comments received during a presentation at the International Conference on “Instability and Fluctuations in Intertemporal Equilibrium Models”, Marseille, June 2005.We thank all the participants and in particular J. Gali and K. Shimomura.We are also grateful to an anonymous referee for useful comments and suggestions.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Preview
Unable to display preview. Download preview PDF.
References
Benhabib, J. and R. Farmer (1994), “Indeterminacy and Increasing Returns,” Journal of Economic Theory, 63, 19–41.
Benhabib, J. and R. Farmer (1999), Indeterminacy and Sunspots in Macroeconomics, in Handbook of Macroeconomics, ed. by Taylor, J.B. and M. Woodford, North-Holland, Amsterdam, 387–448.
Benhabib, J. and K. Nishimura (1998), “Indeterminacy and Sunspots with Constant Returns,” Journal of Economic Theory, 81, 58–96.
Benhabib, J., Nishimura, K. and A. Venditti (2002), “Indeterminacy and Cycles in Two-Sector Discrete-Time Model,”Economic Theory, 20, 217–235.
Bosi, S., Magris, F. and A. Venditti (2005), “Competitive Equilibrium Cycles with Endogenous Labor,” Journal of Mathematical Economics, 41, 325–349.
Grandmont, J.-M., Pintus, P. and R. De Vilder (1998), “Capital-Labor Substitution and Competitive Nonlinear Endogenous Business Cycles,” Journal of Economic Theory, 80, 14–59.
Lloyd-Braga, T., Nourry, C. and A. Venditti (2006), “Indeterminacy with Small Externalities: the Role of Non-Separable Preferences,” International Journal of Economic Theory, 2, 217–239.
Nishimura, K. and A. Venditti (2004a), “Indeterminacy and the Role of Factor Substitutability”, Macroeconomic Dynamics, 8, 436–465.
Nishimura, K. and A. Venditti (2004b), “Asymmetric Factor Substitutability and Indeterminacy”, Journal of Economics, 83, 125–150.
Nishimura, K. and A. Venditti (2004c), “Capital Depreciation, Factors Substitutability and Indeterminacy,” Journal of Difference Equations and Applications, 10, 1153–1169.
Nishimura, K., Takahashi, H. and A. Venditti (2006), “Endogenous Fluctuations in Two-Sector Models: the Role of Preferences,” Journal of Optimization Theory and Applications, 128 (2).
Pintus, P (2006), “Indeterminacy with Almost Constant Returns to Scale: Capital-Labor Substitution Matters”, Economic Theory, 28, 633–649.
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Rights and permissions
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License (http://creativecommons.org/licenses/by-nc-nd/4.0/), which permits any noncommercial use, sharing, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons licence and indicate if you modified the licensed material. You do not have permission under this licence to share adapted material derived from this chapter or parts of it.
The images or other third party material in this chapter are included in the chapter's Creative Commons licence, unless indicated otherwise in a credit line to the material. If material is not included in the chapter's Creative Commons licence and your intended use is not permitted by statutory regulation or exceeds the permitted use, you will need to obtain permission directly from the copyright holder.
Copyright information
© 2012 The Author(s)
About this chapter
Cite this chapter
Nishimura, K., Venditti, A. (2012). Indeterminacy in Discrete-Time Infinite-Horizon Models with Non-linear Utility and Endogenous Labor. In: Stachurski, J., Venditti, A., Yano, M. (eds) Nonlinear Dynamics in Equilibrium Models. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-22397-6_15
Download citation
DOI: https://doi.org/10.1007/978-3-642-22397-6_15
Published:
Publisher Name: Springer, Berlin, Heidelberg
Print ISBN: 978-3-642-22396-9
Online ISBN: 978-3-642-22397-6
eBook Packages: Business and EconomicsEconomics and Finance (R0)