Indeterminacy Under Constant Returns to Scale in Multisector Economies

Jess Benhabib (), Q. Meng and K. Nishimura

Working Papers from C.V. Starr Center for Applied Economics, New York University

Abstract: The purpose of this paper is to characterize the possibility of indeterminacy in multisector growth models that exhibit constant marginal returns to scale at the social level, with empirically realistic small external effects. Our results demonstrate that indeterminacy does not require increasing returns to scale, large external effects, or close to linear utility functions. A small divergence between the social and private returns is sufficient for multiple equilibria.

Keywords: INDETERMINACY; ENDOGENOUS GROWTH. (search for similar items in EconPapers)
JEL-codes: E00 E3 O40 (search for similar items in EconPapers)
Date: 1999
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Journal Article: Indeterminacy under Constant Returns to Scale in Multisector Economies (2000)
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