Benhabib, Jess; Wang, Pengfei - In: Journal of Monetary Economics 60 (2013) 7, pp. 789-805
Self-fulfilling equilibria and indeterminacy can easily arise in a simple financial accelerator model with reasonable parameter calibrations and without increasing returns in production. A key feature for generating indeterminacy in our model is the countercyclical markup due to the procyclical...