Chaos and capacity utilization under increasing returns to scale

David Stockman

Journal of Economic Behavior & Organization, 2011, vol. 77, issue 2, 147-162

Abstract: Abstract It has been shown that adding variable capacity utilization of capital to a one-sector model with a mild production externality can produce local indeterminacy. In this paper, I provide a global analysis of this model and provide sufficient conditions for the existence of Euler equation branching. I show that this branching allows for regime switching equilibria implying [omega]-chaos and positive topological entropy - two notions of chaotic behavior.

Keywords: Variable; capacity; utilization; Increasing; returns; to; scale; Externality; Indeterminacy; Cycles; Chaos; Euler; equation; branching; Regime; switching; [omega]-Chaos; Topological; entropy (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:77:y:2011:i:2:p:147-162

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