(In)determinacy and Time-to-Build

Mauro Bambi () and Omar Licandro ()

No ECO2004/17, Economics Working Papers from European University Institute

Abstract: This paper generalizes Benhabib and Farmer [4], by allowing for a strictly positive time-to-build of capital. The introduction of a time-to-build delay yields a system of mixed functional di¤erential equations. We show that the system has a unique steady state. More important, we prove that the dimension of the unstable manifold is at least one, which implies that a small time-to-build delay rules out local indeterminacy.

Keywords: Indeterminacy; Time-to-Build; Mixed Functional Di¤erential Equations (search for similar items in EconPapers)
JEL-codes: E00 E3 O40 (search for similar items in EconPapers)
Date: 2004
New Economics Papers: this item is included in nep-dge
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Citations: View citations in EconPapers (9)

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