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https://hdl.handle.net/2440/59359
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Type: | Journal article |
Title: | Indeterminacy in a one-sector model revisited: demand versus supply-side indeterminacy |
Author: | Sim, N. |
Citation: | Singapore Economic Review, 2009; 54(2):183-196 |
Publisher: | World Scientific Publishing Co. Pte.Ltd. |
Issue Date: | 2009 |
ISSN: | 0217-5908 1793-6837 |
Statement of Responsibility: | Nicholas C. S. Sim |
Abstract: | This paper explains how indeterminacy in a one-sector model may arise due to externalities in the disutility of labor supply, which is termed as demand-side indeterminacy. This contrasts supply-side indeterminacy that is driven by externalities in the production function as exemplified by Benhabib and Farmer (Journal of Economic Theory, 1994). For the one-sector models considered, I find that indeterminacy arises more easily from the demand than from the supply side. In addition, demand and supply-side indeterminacy generate different cyclical patterns of wages, a feature that is useful for identifying episodes of self-fulfilling prophecies within the two types of indeterminacy. |
Keywords: | Indeterminacy one-sector self-fulfilling prophecies business cycle. |
Rights: | © World Scientific Publishing Company |
DOI: | 10.1142/s0217590809003306 |
Published version: | http://proxy.library.adelaide.edu.au/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=43455272&site=ehost-live&scope=site |
Appears in Collections: | Aurora harvest 5 Economics publications |
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