We analyze how global economic integration of factor markets affects the stability of the macroeconomy, with respect to expectations-driven fluctuations, when countries differ in their labor market institutions. It is shown that, due to the occurrence of equilibrium indeterminacy, liberalization...

We provide a methodology to study the role of market distortions on the emergence of indeterminacy and bifurcations. Most of the specific market imperfections considered in the related literature are particular cases of our framework. Comparing them we obtain several equivalence results in terms...

Considering a finance constrained economy, we discuss the stabilization role of variable labour and capital income taxes under a balanced-budget rule in the presence of consumption externalities of the keeping up with the Joneses type. We find that sufficiently procyclical labor and/or capital...

We study the impact of intra-industry trade and capital mobility on steady state welfare and on the stability properties of two countries with identical technologies and preferences. We consider a two-factor overlapping generations model, featuring one-sector of differentiated goods with taste...

We study the impact of intra-industry trade and capital mobility on steady state welfare and on the stability properties of two countries with identical technologies and preferences. We consider a two-factor overlapping generations model, featuring one-sector of differentiated goods with taste...

The Paper approaches business cycles in terms of extrinsic uncertainty related, not to dynamic indeterminacy of intertemporal equilibria (in the neighborhood of an attractor) or to multiplicity of steady states (in non-linear models), but to static indeterminacy of free entry oligopolistic...

We extend the finance-constrained economy proposed by Woodford (1986) to incorporate imperfectly insured unemployment, by introducing unions and unemployment benefits financed by labour taxation. We show that this simple extension of the Woodford model changes drastically its stability...

In this paper we consider a Ramsey one-sector model with non-separable homothetic preferences, endogenous labour and productive external effects arising from average capital and labour. We show that indeterminacy cannot arise when there are only capital externalities but that it does when there...

In this paper, we consider an aggregate overlapping generations model with endogenous labour, consumption in both periods of life, homothetic preferences and productive external effects coming from the average capital and labour. We show that under realistic calibrations of the parameters, in...

We consider a constant returns to scale, one sector economy with segmented asset markets, encompassing both the Woodford (1986) and overlapping generations models. We analyze the role of public spending, financed by (labour or capital) income and consumption taxation, on the emergence of...