indeterminacy in a two-sector optimal growth model. In equilibrium, consumption externalities operate as if the utility function is …In this paper we show that consumption externalities reduce the degree of increasing returns needed to generate … (close to) linear. If these externalities are strong, the minimum necessary increasing returns approach zero. Therefore, this …

formation and productive externalities. It is shown that the indeterminacy result is largely unaffected when consumption habits …This paper examines the regions of indeterminacy in a two-sector real business cycle model with consumption habit …