Indeterminacy and business-cycle fluctuations in a two-sector monetary economy with externalities

In fact, in contrast to related models in the literature, we find that, under constant returns to scale in production: (i) indeterminacy always prevails in the case of a

More importantly from the point of view of NEG, Behrens and Murata (2007) also ignores the flexible varieties aggregator de- veloped in Kimball (1995), which builds a simple and

Abstract: In a neoclassical economy with endogenous capital- and labor-augmenting technical change the steady-state growth rate of output per worker is shown to in- crease in

Keynesian model for monetary poliy analysis whih onsist of an IS urve relating the output gap to the expeted.. real interest rate, a Phillips urve relating ination, expeted ination

as the one obtained by Bond et al. [10] in a similar two-sector model with taxes and by Benhabib et al. [6], Mino [21] or Nishimura and Venditti [25] in a similar two-sector model

Contrary to the previous Proposition, the existence of local indetermin- acy does not require the elasticity of capital-labor substitution in the con- sumption good sector to be

Assuming gross substitutability and a capital intensive consumption good, we prove that when dynamic efficiency holds, local indeterminacy and sunspot fluctuations occur with low

Proposition 5. It requires also intermediary values for the elasticity of intertemporal substitution in consumption. Figure 4 shows on the contrary that in case ii), γ = γ F and