Endogenous fluctuations and public services in a simple OLG economy

In a simple OLG model, we introduce public services which work as a source of utility. Assuming constant returns to scale in the production, we show that public services promote the occurrence of local indeterminacy. In contrast to a lot of existing contributions which have exploited productive externalities, this paper establishes that the existence of externalities in the utility function can explain the emergence of endogenous fluctuations.

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Year of publication:	2003-05-22
Authors:	Seegmuller, Thomas
Published in:	Economics Bulletin. - AccessEcon, ISSN 1545-2921. - Vol. 5.2003, 10, p. 1-7
Publisher:	AccessEcon
Subject:	Endogenous fluctuations

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Extent:	application/pdf
Type of publication:	Article
Classification:	E3 - Prices, Business Fluctuations, and Cycles ; H4 - Publicly Provided Goods
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10010630216