Autore
Hintermaier, Thomas

Titolo
Lower bounds on exernalities in sunspot models
Periodico
European University Institute of Badia Fiesolana (Fi). Department of Economics - Working papers
Anno: 2001 - Fascicolo: 4 - Pagina iniziale: 1 - Pagina finale: 35

A method for decribing preference independently of the functional form of utility is development for log-linearized models and applied to finding general conditions for indeterminacy in the presence of externalities. It is shown that if the elasticity of output with respect to labor in the social production function is less than unity and externalities arise from aoutput then there are no concave utility functions consistent with indeterminacy. Considering the same assumption in the more general setting where externalities to labor and capital can be different, we prove that there are no utility funztions separable in consumption and labor and no utility functions in the KPR class consistent with indeterminacy.




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