Plausibility of Indeterminacy and Complex Dynamics

Stefano Bosi () and Francesco Magris
Additional contact information
Stefano Bosi: EPEE, University of Evry

No 02-08, Documents de recherche from Centre d'Études des Politiques Économiques (EPEE), Université d'Evry Val d'Essonne

Abstract: We study a pure exchange in…nite horizon economy in which a given share of consumption purchases must be paid cash in the hand of the representative consumer. We challenge the viewpoint according to which indeterminacy, sunspot equilibria and complex dynamics would require implausible features such as strong increasing returns to scale or unconventional speci…cations for fundamentals. The economy may exhibit multiple equilibria no matter which the fundamental speci…cation, the only requirement being a share of consumption to be paid cash su¢ciently low. Complex dynamics, such as chaos and cycles of any periodicity, can emerge under gross substitutability, condition usually known for eliminating such phenomena.

Keywords: cash-in-advance; indeterminacy; sunspot; chaos (search for similar items in EconPapers)
JEL-codes: C62 E32 E41 (search for similar items in EconPapers)
Pages: 19 pages
Date: 2002
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
https://www.univ-evry.fr/fileadmin/mediatheque/uev ... s/Epee/wp/02-08R.pdf (application/pdf)

Related works:
Journal Article: Plausibility of Indeterminacy and Complex Dynamics (2005)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eve:wpaper:02-08

Access Statistics for this paper

More papers in Documents de recherche from Centre d'Études des Politiques Économiques (EPEE), Université d'Evry Val d'Essonne Contact information at EDIRC.
Bibliographic data for series maintained by Samuel Nosel ().