Multiple equilibria in the Aghion-Howitt model

Jess Benhabib

    Research output: Contribution to journalArticle

    Abstract

    We show that the simple Aghion-Howitt model exhibits oscillatory indeterminacy in the process of creative destruction as firms undertaking new research do not internalize their effect on existing firms. A simple calibration shows that indeterminacy occurs for quite plausible parametrizations of the share of the intermediate good.

    Original languageEnglish (US)
    Pages (from-to)112-116
    Number of pages5
    JournalResearch in Economics
    Volume68
    Issue number2
    DOIs
    StatePublished - Jun 2014

    Keywords

    • Endogenous growth
    • Indeterminacy
    • Quality ladder

    ASJC Scopus subject areas

    • Economics and Econometrics

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