GUO, JANG-TING; HARRISON, SHARON G. - In: Journal of Public Economic Theory 10 (2008) 3, pp. 383-397
It has been shown that an otherwise standard one-sector real business cycle model may exhibit indeterminacy and sunspots under a balanced-budget rule that consists of fixed and "wasteful" government spending and proportional income taxation. However, the economy always displays saddle-path...