Indeterminacy in the free-trade world
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In this article, the authors show that indeterminacy arises in a discrete-time competitive two-country dynamic model of international trade in which externalities, imperfect competition, public goods, and government intervention are assumed away.Abstract:
We show that indeterminacy arises in a discrete-time competitive two-country dynamic model of international trade in which externalities, imperfect competition, public goods, and government intervention are assumed away. The present model is a standard dynamic trade model in the sense that there is neither an international credit market nor international factor mobility, and these intrinsic features are a source of indeterminacy. Indeterminacy is implied by the condition for the existence of a steady state.read more
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Indeterminacy and Increasing Returns
Jess Benhabib,Roger E. A. Farmer +1 more
TL;DR: In this paper, the authors investigate properties of the one-sector growth model with increasing returns under two organizational structures capable of reconciling the existence of aggregate increasing returns with competitive behavior by firms.
Journal ArticleDOI
Indeterminacy and Increasing Returns
Jess Benhabib,Roger E. A. Farmer +1 more
TL;DR: In this article, the authors investigate properties of the one-sector growth model with increasing returns under two organizational structures capable of reconciling the existence of aggregate increasing returns with competitive behavior by firms.
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Indeterminacy and sunspots in macroeconomics
Jess Benhabib,Roger E. A. Farmer +1 more
TL;DR: An overview of the recent literature on indeterminacy and sunspots in macroeconomics can be found in this article, where a simple framework for illustrating the mechanisms of various dynamic equilibrium models that give rise to indeterminate equilibria is provided.
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Indeterminacy and sunspots in macroeconomics
Jess Benhabib,Roger E. A. Farmer +1 more
TL;DR: An overview of the recent literature on indeterminacy and sunspots in macroeconomics can be found in this article, where a simple framework for illustrating the mechanisms of various dynamic equilibrium models that give rise to indeterminate equilibria is provided.
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Indeterminacy and Sector-Specific Externalities
Jess Benhabib,Roger E. A. Farmer +1 more
TL;DR: In this article, the authors introduce mild increasing returns to scale into a version of the real business cycle model, which occurs as a consequence of sector-specific externalities, that is, externalities where the output of the consumption and investment sectors have external effects on the output within their own sectors.