Plausibility of Indeterminacy and Complex Dynamics

Stefano Bosi, Guido Cazzavillan and Francesco Magris

Annals of Economics and Statistics, 2005, issue 78, 103-115

Abstract: We study a pure exchange economy with infinite-lived agents, in which a share of consumption purchases must be paid cash. The economy may exhibit multiple equilibria, no matter what the fundamental specification, the only requirement being a share of consumption to be paid cash sufficiently low. Complex dynamics, such as chaos and cycles of any periodicity, can emerge under gross substitutability, a condition usually known for eliminating such phenomena.

Date: 2005
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Working Paper: Plausibility of Indeterminacy and Complex Dynamics (2002)
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Persistent link: https://EconPapers.repec.org/RePEc:adr:anecst:y:2005:i:78:p:103-115

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