Global Indeterminacy in a Tourism Sector Model

Oliviero Carboni and P. Russu

Working Paper CRENoS from Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia

Abstract: This article develops a dynamic optimising macro model of a open economy specialised in tourism based on natural resources. Environmental externalities are explicitly introduced in the production function. Global dynamic analysis shows that, under some conditions on the parameters, if the initial values of the state variables are close enough to the coordinates of Pa, then there exists a continuum of equilibrium trajectories approaching Pa and one trajectory approaching Pb. Therefore, the model exhibits global indeterminacy, since either Pa or Pb can be selected according to agent expectations.

Keywords: global and local indeterminacy; environmental externalities; history versus expectations; hopf bifurcation (search for similar items in EconPapers)
JEL-codes: C62 O13 O41 Q22 (search for similar items in EconPapers)
Date: 2012
New Economics Papers: this item is included in nep-cwa, nep-dge, nep-env and nep-tur
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://crenos.unica.it/crenos/node/3824
https://crenos.unica.it/crenos/sites/default/files/WP12-30.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cns:cnscwp:201230

Access Statistics for this paper

More papers in Working Paper CRENoS from Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia Contact information at EDIRC.
Bibliographic data for series maintained by CRENoS ().