Path-dependence without increasing returns to scale and network externalities

Portage : Path Dependence and Increasing Returns in U . S . History ∗

We examine portage sites in the U.S. South, Mid-Atlantic, and Midwest, including those on the fall line, a geomorphologic feature in the southeastern U.S. marking the final rapids on rivers before the ocean. Historically, waterborne transport of goods required portage around the falls at these points, while some falls provided water power during early industrialization. These factors attracted ...

Stochastic Growth with Increasing Returns: Stability and Path Dependence

The paper demonstrates global stability in a class of stochastic overlapping generations economies with increasing returns. These results are applied to the study of path dependent dynamics. In particular, for nonlinear stochastic models it is seen that persistence of the historical state and formal ergodicity may easily coincide. A new definition of path dependence is proposed that incorporate...

Capacity Utilization under Increasing Returns to Scale

Path-Dependence of Leveraged ETF Returns

It is well-known that leveraged exchange-traded funds (LETFs) don’t reproduce the corresponding multiple of index returns over extended (quarterly or annual) investment horizons. In 2008, most leveraged ETFs underperformed the corresponding static strategies. In this paper, we study this phenomenon in detail. We give an exact formula linking the return of a leveraged fund with the corresponding...

Indeterminacy, Business Cycles, and Modest Increasing Returns to Scale

In this paper a dynamic model of monopolistic competition with entry and exit has been presented and examined. It is shown that the model displays indeterminacy at modest degrees of increasing returns in cases where the market power in the consumption goods market and in the investment goods market diiers. Furthermore, the model is quite successful in replicating major U.S. business cycle facts...