Does dynamic efficiency rule out sunspot fluctuations ?

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Does dynamic efficiency rule out sunspot fluctuations ?

Jean-Pierre Drugeon, Carine Nourry, Alain Venditti

To cite this version:

Jean-Pierre Drugeon, Carine Nourry, Alain Venditti. Does dynamic efficiency rule out sunspot fluc-tuations ?. 2006. �halshs-00410787�

GREQAM

Universités d'Aix-Marseille II et III

Document de Travail

n°2006-49

DOES DYNAMIC EFFICIENCY RULE OUT

SUNSPOT FLUCTUATIONS ?

Jean-Pierre DRUGEON

Carine NOURRY

Alain VENDITTI

December 2006

Abstract : The aim of this paper is to discuss the role of the elasticity of capital-labor

substitution on the local determinacy properties of the steady state in a two-sector economy with CES technologies and sector-specific externalities.

Keywords : Sector-specific externalities, constant returns, capital-labor substitution,

indeterminacy.