Our main objective is to study the impact of consumption externality like keeping of with the Joneses on the properties of long-run equilibrium in the two-sector optimal growth model. Does this consumption externality lead to a new mechanism of local indeterminacy and endogenous fluctuations? We...

In this paper, we analyze the importance of the frequency of decision making for macroeconomic dynamics. We explain how the frequency of decision making (period length) and the unit of time measurement (calibration frequency) differ and study the implications of this difference for macroeconomic...

This paper investigates the interlinkage in the business cycles based on sunspot fluctuations of large-country economies in a free-trade equilibrium. We consider a two-country, two-good, two-factor general equilibrium model with Cobb-Douglastechnologies, sector-specific externalities and linear...

This paper sets up an OLG economy with endogenous life expectancy to study how fiscal policy that redistributes between generations can open the door to sunspot equilibria. Agents invest independently in their own human capital, produce and consume output, and receive a pension upon retirement....

We illustrate that the existence of the environmental Kuznets curve (EKC) could be the result of indeterminacy of equilibria. In a simple neoclassical growth model with a single environmental externality in households’ utility function and with public abatement, we characterize the condition...

Monetary growth targeting is often seen as an effective way of supporting macroeconomic stability. We scrutinize this property by checking whether multiplicity of equilibria, in the form of local indeterminacy (LI), can be both a possible and a plausible outcome of a basic model with an...

Our main objective is to study the impact of consumption externality like keeping of with the Joneses on the properties of long-run equilibrium in the two-sector optimal growth model. Does this consumption externality lead to a new mechanism of local indeterminacy and endogenous fluctuations? We...

This Paper explores the local stability properties of the steady state in the two-sector neo-classical growth model with sector–specific externalities. We show analytically that capital adjustment costs of any size preclude local indeterminacy nearby the steady state for every empirically...

At the beginning of december 2003 the nineth conference of the parties (COP) of the UN framework convention on climate change (Rio declaration 1992) will take place. This meeting is crucial as it depends only on russia´s ratification to get the Kyoto protocol started soon. This paper reflects...