Income effects and indeterminacy in a calibrated one-sector growth model

• 成果类型: Article
• 署名作者: Jaimovich, Nir
• 署名单位: Stanford University
• 刊物名称: JOURNAL OF ECONOMIC THEORY
• ISSN/ISSBN: 0022-0531
• DOI: 10.1016/j.jet.2008.03.007
• 发表日期: 2008
• 页码: 610-623
• 关键词: Indeterminate equilibria; Utility function; Sunspot shocks; business cycles

摘要

This note analyzes how the indeterminacy of competitive equilibrium in one-sector growth models depends on the magnitude of the households' income effect on the demand for leisure. Since I am interested in quantitatively characterizing regions of indeterminacy, I use the Jaimovich and Rebelo [N. Jaimovich, S. Rebelo, Can news about the future drive the business cycle? Mimeo, Northwestern University, 2007] preferences that span a wide range of income effect values. I find that indeterminacy can occur for levels of aggregate-returns-to-scale that are well within recent empirical estimates. For these regions of indeterminacy, the model, when driven solely by sunspot shocks, generates second-moment properties that are consistent with the U.S. data at the business cycle frequency. (C) 2008 Elsevier Inc. All rights reserved.