Indeterminacy and sunspots with constant returns

Jess Benhabib, Kazuo Nishimura

    Research output: Chapter in Book/Report/Conference proceedingChapter


    Recently there has been a renewed interest in the possibility of indeterminacy and sunspots, or alternatively put, in the existence of a continuum of equilibria that arises in dynamic economies with some market imperfections. Much of the research in this area has been concerned with the empirical plausibility of indeterminacy in markets with external effects or with monopolistic competition and which exhibit some degree of increasing returns. While the early results on indeterminacy relied on relatively large increasing returns and high markups, more recently Benhabib and Farmer (1996a) showed that indeterminacy can also occur in two-sector models with small sector-specific external effects and very mild increasing returns.

    Original languageEnglish (US)
    Title of host publicationNonlinear Dynamics in Equilibrium Models
    Subtitle of host publicationChaos, Cycles and Indeterminacy
    PublisherTUT Press
    Number of pages36
    StatePublished - 2011

    ASJC Scopus subject areas

    • Medicine (miscellaneous)


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