Admiration is a source of multiple equilibria and indeterminacy: A comment on Chen and Hsu (2007)
Yukio Karasawa-Ohtashiro (),
Dapeng Cai () and
Akihiko Yanase ()
Economics Letters, 2018, vol. 168, issue C, 141-143
The aim of this note is to revise and correct the properties of steady state(s) obtained in Chen and Hsu (2007). They proved that admiration and decreasing marginal impatience may establish indeterminacy when the steady state is unique. Instead, we prove that, in the long-run equilibrium (equilibria), (i) indeterminacy never occurs when the steady state is unique, and (ii) indeterminacy may occur only when the steady states are not unique.
Keywords: Consumption externality; Neoclassical growth model; Multiple steady state; Indeterminacy (search for similar items in EconPapers)
JEL-codes: E62 O40 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:168:y:2018:i:c:p:141-143
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