The University of Southampton
University of Southampton Institutional Repository

Determinacy through intertemporal capital adjustment costs

Herrendorf, Berthold and Valentinyi, Ákos (2003) Determinacy through intertemporal capital adjustment costs Review of Economic Dynamics, 6, (3), pp. 483-497. (doi:10.1016/S1094-2025(03)00020-6).

Record type: Article

Abstract

It is well known that if there are mild sector-specific externalities, then the steady state of the standard two-sector real business cycle model can become indeterminate and endogenous business cycles can arise. We show that this result is not robust to the introduction of standard intertemporal capital adjustment costs, which may accrue when total capital is adjusted or when each sector's capital is adjusted. We find for both forms of adjustments costs that the steady state is determinate for all empirically plausible parameter values. We also find that determinacy occurs for a much larger range of parameter values when adjusting each sector's capital is costly.

Full text not available from this repository.

More information

Published date: 2003
Keywords: capital adjustment costs, determinacy, indeterminacy, local stability, sector-specific externality

Identifiers

Local EPrints ID: 33445
URI: http://eprints.soton.ac.uk/id/eprint/33445
ISSN: 1094-2025
PURE UUID: 586bc6a0-88f0-4784-8689-75edf8d029a2

Catalogue record

Date deposited: 16 May 2006
Last modified: 17 Jul 2017 15:52

Export record

Altmetrics

Contributors

Author: Berthold Herrendorf
Author: Ákos Valentinyi

University divisions

Download statistics

Downloads from ePrints over the past year. Other digital versions may also be available to download e.g. from the publisher's website.

View more statistics

Atom RSS 1.0 RSS 2.0

Contact ePrints Soton: eprints@soton.ac.uk

ePrints Soton supports OAI 2.0 with a base URL of http://eprints.soton.ac.uk/cgi/oai2

This repository has been built using EPrints software, developed at the University of Southampton, but available to everyone to use.

We use cookies to ensure that we give you the best experience on our website. If you continue without changing your settings, we will assume that you are happy to receive cookies on the University of Southampton website.

×