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• W1569756023 abstract "Abstract This paper quantitatively examines the empirical plausibility of equilibrium indeterminacy and sunspot‐driven cyclical fluctuations in a real business cycle model with two distinct production sectors that yield consumption and investment goods, together with separable or non‐separable preferences. When calibrated to match the observed progressivity of the US federal individual income tax schedule, each version of our model economy exhibits an indeterminate steady state under empirically realistic combinations of the household's labour supply elasticity and the degree of productive externalities in the investment goods sector. Therefore, macroeconomic instability due to agents' self‐fulfilling expectations may, in fact, be a prevalent feature of the US economy." @default.
• W1569756023 created "2016-06-24" @default.
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• W1569756023 date "2015-05-01" @default.
• W1569756023 modified "2023-09-25" @default.
• W1569756023 title "Indeterminacy with Progressive Taxation and Sector-Specific Externalities" @default.
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• W1569756023 doi "https://doi.org/10.1111/1468-0106.12106" @default.
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