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Title: A note on indeterminacy and investment adjustment costs in an endogenously growing small open economy
Authors: Chin, Chin C.-T.;Guo, J.-T.;Lai, Ching-Chong
Contributors: 經濟系
Date: 2012
Issue Date: 2015-05-14 17:39:11 (UTC+8)
Abstract: This note analytically examines the interrelations between macroeconomic (in)stability and investment adjustment costs in a one-sector endogenously growing small-open economy representative-agent model. We show that under costly capital accumulation, the economy exhibits indeterminacy and sunspots if and only if the equilibrium wage-hours locus slopes upward and is steeper than the household's labor supply curve. By contrast, the economy without adjustment costs for capital investment always displays saddlepath stability and equilibrium uniqueness, regardless of the degree of increasing returns inaggregate production. Copyright © 2012 Cambridge University Press.
Relation: Macroeconomic Dynamics, 16(S3), 438-450
Data Type: article
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