Abstract
Recently there has been a surge of interest in endogenous business cycles that arise in competitive laissez-faire economies. In the context of standard overlapping generations economies, conditions for the existence of equilibrium cycles have been given by Grandmont (1983) and by Benhabib and Day (1982). Models of the economy with extrinsic uncertainty or “sunspots” that have been developed by Shell (1977) and by Cass and Shell (1983) (see also Balasko (1983)) can also lead to equilibrium cycles.
Journal of Economic Theory 35, 284–306, 1985.
Jess Benhabib’s research was supported in part by the National Science Foundation Grant SES 8308225, and by the C. V. Starr Center for Applied Economics at New York University. We would like to thank the referees for pointing out errors as well as making very valuable suggestions. We are also grateful to Clive Bull and Chuck Wilson for enlightening discussions. For any remaining errors, we are entirely responsible.
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Benhabib, J., Nishimura, K. (2012). Competitive Equilibrium Cycles. In: Stachurski, J., Venditti, A., Yano, M. (eds) Nonlinear Dynamics in Equilibrium Models. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-22397-6_4
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