On the Structure of Ramsey Equilibrium: Cycles, Indeterminacy, and Sunspots.

B-Tier
Journal: Economic Theory
Year: 1994
Volume: 4
Issue: 5
Pages: 745-64

Score contribution per author:

2.011 = (α=2.01 / 1 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

We consider a one-sector neoclassical capital accumulation model under borrowing constraints with infinitely lived heterogeneous households. Under the standard assumptions of strictly concave and time-additive utility functionals and a strictly concave production function, we show that perfect foresight equilibria can be non-unique, even locally non-unique (indeterminate), and periodic of arbitrary long period rho. Moreover, we prove that there can exist non-trivial rational expectations (sunspot) equilibria when the agent's expectations about future factor prices depend on extrinsic uncertainty.

Technical Details

RePEc Handle
repec:spr:joecth:v:4:y:1994:i:5:p:745-64
Journal Field
Theory
Author Count
1
Added to Database
2026-01-29