Indeterminacy under social constant returns and costs of adjusting capital
- Authors
- Kim, J.
- Issue Date
- 2012
- Keywords
- Constant Returns to Scale; Costs of Adjusting Capital; Indeterminacy
- Citation
- Journal of Economic Theory and Econometrics, v.23, no.3, pp.187 - 200
- Indexed
- SCOPUS
KCI
- Journal Title
- Journal of Economic Theory and Econometrics
- Volume
- 23
- Number
- 3
- Start Page
- 187
- End Page
- 200
- URI
- https://scholar.korea.ac.kr/handle/2021.sw.korea/110662
- ISSN
- 1229-2893
- Abstract
- It has been shown that, in a small open economy with traded and nontraded goods, indeterminacy occurs under constant returns to scale for the social technology with an arbitrarily small degree of externalities. This paper claims that costs of adjusting capital increase the required degree of externalities for indeterminacy to arise. Under empirically plausible levels of adjustment costs and externalities, indeterminacy does not arise in a model with social constant returns.
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Collections - College of Political Science & Economics > Department of Economics > 1. Journal Articles
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