Nishimura, Kazuo; Venditti, Alain; Yano, Makoto - In: Economic Theory 55 (2014) 2, pp. 357-392
In the present paper, we consider a two-country, two-good, two-factor general equilibrium model with CIES nonlinear preferences, asymmetric technologies across countries and decreasing returns to scale. It is shown that aggregate instability and endogenous fluctuations may occur due to...