Article ID Journal Published Year Pages File Type
5054376 Economic Modelling 2014 6 Pages PDF
Abstract
This paper incorporates negative consumption externality embodying “jealousy” and “running away from the Joneses” into Guo and Lansing (2007)'s model with production externality and endogenous depreciation, and examines how consumption externality helps to generate equilibrium indeterminacy together with production externality. Specifically, the existence of consumption externality reduces the upper and lower bounds of production externality for local indeterminacy, and when the degree of consumption externality increases, the upper and lower bounds of production externalities for local indeterminacy are both reduced.
Related Topics
Social Sciences and Humanities Economics, Econometrics and Finance Economics and Econometrics
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