We consider a discrete-time two-sector Cobb-Douglas economy with positive sector specific external effects. We show that indeterminacy of steady states and cycles can easily arise with constant or decreasing social returns to scale, and very small market imperfections. This is in sharp contrast...

This study constructs a class of dynamic models in which optimal paths are generated by nonlinear transition functions similar to a tent map. We provide a sufficient condition under which such a transition function is a chaotic map. This characterization provides a way to construct complex...

This paper introduces a multisector model of commodity markets with storage, where equilibrium is defined by profit maximization, arbitrage and market clearing conditions. We then solve for the decentralized equilibrium via a corresponding dynamic program. We also describe the dynamics of the...

Dutta (J. Econom. Theory, 1991, 55, 64?94) showed that long-run optimality of the limit of discounted optima when the discount rate vanishes is implied by a certain bound on the value function of the optimal program. We introduce a new method to verify this bound using coupling techniques.