We show that, with endogenous investment, virtually all monetary policy rules that set a nominal interest rate in response solely to expected future inflation induce real indeterminacy in models with (i) staggered prices, (ii) staggered prices and staggered wages, and (iii) staggered prices,...

In this paper, we examine the effects of constant-rate factor taxation on macroeconomic stability in the Woodford (1986) model. Our focus is on how the degree of factor substitution, as measured by the elasticity of factor substitution (EOS) in production, affects different balanced-budget tax...

This paper examines the relation between aggregate elasticity of substitution (AES) and capital accumulation (the AES-K relation) in a two-level, two-sector Solow growth model. There are two intermediate goods produced by capital and labor, while the final good is produced by combining the two...