Admiration is a Source of Indeterminacy

نویسندگان

  • Been-Lon Chen
  • Mei Hsu
چکیده

Can consumption externalities be a source of indeterminacy? The answer is negative in conventional wisdom. In this paper we show that consumption externalities establish local indeterminacy if the degree of decreasing impatience is sufficiently large. Dynamic models with indeterminacy are valuable as they tend to explain economic fluctuations without relying on exogenous shocks and question interpretation of simple estimation obtained by pooling data, among others. JEL classification: E62, O40.

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تاریخ انتشار 2006