The possibility of indeterminacy and sunspot fluctuations in dynamic rational expectations models has been often questioned on empirical grounds, for such models are widely believed to rely on implausibly high degrees of increasing returns to scale and/or other controversial calibrations of...

It is well known from the literature that the introduction of financial constraints in economies with infinite-lived agents can be responsible for the occurrence of multiple equilibria and en- dogenous fluctuations. However, the question of the persistence of such phenomena when the constraints...

We study a pure exchange economy with infinite-lived agents, in which a share of consumption purchases must be paid cash. The economy may exhibit multiple equilibria, no matter what the fundamental specification, the only requirement being a share of consumption to be paid cash sufficiently low....