RIEB Discussion Paper Series No.2015-37
Title
Indeterminacy in a Model with Production Externality and Inferiority in Consumption
Abstract
We examine the dynamic property of a two sector model with sector-speci c externality and inferiority in consumption, and show that if one good is inferior, it is possible that multiple steady states exist and indeterminacy occurs around the one of the steady states. Also, it will be shown that capital intensity reversal between the private and the social levels is not necessary for indeterminacy to arise, and factor intensity ranking across two sectors does not matter to the result.
Keywords
Externality, Inferiority, Indeterminacy
Inquiries
Kazumichi IWASA
Research Institute for Economics and Business Administration,
Kobe University
Rokkodai-cho, Nada-ku, Kobe
657-8501 Japan
Phone: +81-78-803-7036
FAX: +81-78-803-7059
Kazuo NISHIMURA
Research Institute for Economics and Business Administration,
Kobe University & KIER, Kyoto University
Rokkodai-cho, Nada-ku, Kobe
657-8501 Japan
Phone: +81-78-803-7036
FAX: +81-78-803-7059
Research Institute for Economics and Business Administration,
Kobe University
Rokkodai-cho, Nada-ku, Kobe
657-8501 Japan
Phone: +81-78-803-7036
FAX: +81-78-803-7059
Kazuo NISHIMURA
Research Institute for Economics and Business Administration,
Kobe University & KIER, Kyoto University
Rokkodai-cho, Nada-ku, Kobe
657-8501 Japan
Phone: +81-78-803-7036
FAX: +81-78-803-7059