History dependence in concave economies

This paper investigates concave intertemporal optimization problems and derives two mechanisms, either growth or control-state interactions (e.g. due to endogenous preferences), that allow for multiple steady states including an unstable one. Therefore, history dependence is possible in a perfectly governed economy subject to the law of diminishing returns if one of these two mechanisms is present. This result complements a large amount of literature that attributes history dependence to convexities. As a consequence, lock-ins into undesired evolutions are possible beyond the familiar case of increasing returns.