Indeterminate growth paths and stability
نویسندگان
چکیده
Indeterminacy in an economic growth model arises whenever the stable manifold has dimension greater than the number of predetermined initial conditions. The stability (indeterminacy) of transition paths in the Benhabib and Farmer (1996) model of growth is investigated, using both the Lyapunov method and numerical simulation techniques. The sensitivity of transient dynamics is analyzed with respect to the choice of parameter values and with respect to the choice of initial conditions. The likelihood that the business cycle is a pure &sunspot' phenomenon is investigated. ( 2000 Elsevier Science B.V. All rights reserved. JEL classixcation: E00; E3; O40
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