We show that the introduction of a constant tariff or subsidy levied on foreign energy can lead to a rich set of endogenous fluctuations around the unique steady state, including stable 2-, 4-, 8-, and 15-cycles, quasiperiodic orbits, and chaos. This is demonstrated in a standard neoclassical...

We analyse the implications of unions (efficient bargaining) for multiplicity of stationary states and welfare, local indeterminacy, bifurcations and endogenous fluctuations (deterministic and stochastic). We use an overlapping generations model with external increasing returns to scale, where...

This paper examines the quantitative implications of government fiscal policy in a discrete-time one-sector growth model with a productive externality that generates social increasing returns to scale. Starting from a laissez-faire economy that exhibits local indeterminacy, we show that the...

This paper examines the quantitative implications of government fiscal policy in a discrete-time one-sector growth model with a productive externality that generates social increasing returns to scale. Starting from a laissez-faire economy that exhibits local indeterminacy, we show that the...

This paper explores the effects of government fiscal policy in an infinite horizon, one-sector growth model with a productive externality and aggregate increasing returns. We show that, depending on the level of a constant tax or subsidy, the model can exhibit various types of endogenous...

Chaotic behavior of prices can emerge as a robust result from a very simple and standard price adjustment process. Consider the dynamics of prices adjusting according to supply and demand in economies with increasing returns to scale. Increasing returns in production implies the existence of a...