Sunspot fluctuations in two‐sector models: New results with additively separable preferences

Frédéric Dufourt, Kazuo Nishimura and Alain Venditti ()
Additional contact information
Frédéric Dufourt: AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique, AMU - Aix Marseille Université

Post-Print from HAL

Abstract: Abstract We analyze the emergence of local indeterminacy and sunspot‐driven fluctuations in the standard two‐sector model with additively separable preferences as a function of various structural parameters influencing the degree of increasing returns to scale, the amount of intertemporal substitution in consumption, and the elasticity of the aggregate labor supply curve. On the theoretical side, we prove the existence of both a flip and a Hopf bifurcation locus in the corresponding parameter space. We also show that local indeterminacy can be obtained under any labor supply elasticity or under an arbitrarily low elasticity of intertemporal substitution in consumption. On the empirical side, we find that indeterminacy and sunspot fluctuations are robust features of two‐sector models, prevailing for most empirically plausible calibrations for these parameters.

Date: 2016-01-27
References: Add references at CitEc
Citations:

Published in International Journal of Economic Theory, 2016, 12 (1), pp.67-83. ⟨10.1111/ijet.12081⟩

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
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:hal:journl:hal-05659175

DOI: 10.1111/ijet.12081

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().