Market distortions and local indeterminacy: a general approach
Autor(a) principal: | |
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Data de Publicação: | 2014 |
Outros Autores: | , |
Tipo de documento: | Artigo |
Idioma: | eng |
Título da fonte: | Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
Texto Completo: | http://hdl.handle.net/10400.14/36471 |
Resumo: | We provide a methodology to study the role of market distortions on the emergence of indeterminacy and bifurcations. It consists in introducing general specifications for the elasticities of the crucial functions defining the aggregate equilibrium dynamics of the model. This allows us to study how market distortions influence the range of values for the elasticity of input substitution under which local indeterminacy and bifurcations occur, highlighting the main channels and classes of distortions responsible for indeterminacy. Most of the specific market imperfections considered in the related literature are particular cases of our framework. Comparing them we obtain several equivalence results in terms of local dynamic properties. Applying this methodology to the Woodford [30] framework we find that distortions in the capital market, per se, do not play a major role. We further show that, for empirically plausible values of elasticity of substitution between inputs, indeterminacy requires a minimal degree of distortions. This degree seems to be high under output market distortions, while with labor market distortions the required degree is empirically plausible. |
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Market distortions and local indeterminacy: a general approachEndogenous fluctuationsExternalitiesImperfect competitionIndeterminacyMarket distortionsTaxationWe provide a methodology to study the role of market distortions on the emergence of indeterminacy and bifurcations. It consists in introducing general specifications for the elasticities of the crucial functions defining the aggregate equilibrium dynamics of the model. This allows us to study how market distortions influence the range of values for the elasticity of input substitution under which local indeterminacy and bifurcations occur, highlighting the main channels and classes of distortions responsible for indeterminacy. Most of the specific market imperfections considered in the related literature are particular cases of our framework. Comparing them we obtain several equivalence results in terms of local dynamic properties. Applying this methodology to the Woodford [30] framework we find that distortions in the capital market, per se, do not play a major role. We further show that, for empirically plausible values of elasticity of substitution between inputs, indeterminacy requires a minimal degree of distortions. This degree seems to be high under output market distortions, while with labor market distortions the required degree is empirically plausible.Veritati - Repositório Institucional da Universidade Católica PortuguesaLloyd-Braga, TeresaModesto, LeonorSeegmuller, Thomas2022-01-15T10:15:11Z2014-052014-05-01T00:00:00Zinfo:eu-repo/semantics/publishedVersioninfo:eu-repo/semantics/articleapplication/pdfhttp://hdl.handle.net/10400.14/36471eng0022-053110.1016/j.jet.2013.12.00484897062227000335099600009info:eu-repo/semantics/openAccessreponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãoinstacron:RCAAP2023-07-12T17:41:57Zoai:repositorio.ucp.pt:10400.14/36471Portal AgregadorONGhttps://www.rcaap.pt/oai/openaireopendoar:71602024-03-19T18:29:38.754902Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãofalse |
dc.title.none.fl_str_mv |
Market distortions and local indeterminacy: a general approach |
title |
Market distortions and local indeterminacy: a general approach |
spellingShingle |
Market distortions and local indeterminacy: a general approach Lloyd-Braga, Teresa Endogenous fluctuations Externalities Imperfect competition Indeterminacy Market distortions Taxation |
title_short |
Market distortions and local indeterminacy: a general approach |
title_full |
Market distortions and local indeterminacy: a general approach |
title_fullStr |
Market distortions and local indeterminacy: a general approach |
title_full_unstemmed |
Market distortions and local indeterminacy: a general approach |
title_sort |
Market distortions and local indeterminacy: a general approach |
author |
Lloyd-Braga, Teresa |
author_facet |
Lloyd-Braga, Teresa Modesto, Leonor Seegmuller, Thomas |
author_role |
author |
author2 |
Modesto, Leonor Seegmuller, Thomas |
author2_role |
author author |
dc.contributor.none.fl_str_mv |
Veritati - Repositório Institucional da Universidade Católica Portuguesa |
dc.contributor.author.fl_str_mv |
Lloyd-Braga, Teresa Modesto, Leonor Seegmuller, Thomas |
dc.subject.por.fl_str_mv |
Endogenous fluctuations Externalities Imperfect competition Indeterminacy Market distortions Taxation |
topic |
Endogenous fluctuations Externalities Imperfect competition Indeterminacy Market distortions Taxation |
description |
We provide a methodology to study the role of market distortions on the emergence of indeterminacy and bifurcations. It consists in introducing general specifications for the elasticities of the crucial functions defining the aggregate equilibrium dynamics of the model. This allows us to study how market distortions influence the range of values for the elasticity of input substitution under which local indeterminacy and bifurcations occur, highlighting the main channels and classes of distortions responsible for indeterminacy. Most of the specific market imperfections considered in the related literature are particular cases of our framework. Comparing them we obtain several equivalence results in terms of local dynamic properties. Applying this methodology to the Woodford [30] framework we find that distortions in the capital market, per se, do not play a major role. We further show that, for empirically plausible values of elasticity of substitution between inputs, indeterminacy requires a minimal degree of distortions. This degree seems to be high under output market distortions, while with labor market distortions the required degree is empirically plausible. |
publishDate |
2014 |
dc.date.none.fl_str_mv |
2014-05 2014-05-01T00:00:00Z 2022-01-15T10:15:11Z |
dc.type.status.fl_str_mv |
info:eu-repo/semantics/publishedVersion |
dc.type.driver.fl_str_mv |
info:eu-repo/semantics/article |
format |
article |
status_str |
publishedVersion |
dc.identifier.uri.fl_str_mv |
http://hdl.handle.net/10400.14/36471 |
url |
http://hdl.handle.net/10400.14/36471 |
dc.language.iso.fl_str_mv |
eng |
language |
eng |
dc.relation.none.fl_str_mv |
0022-0531 10.1016/j.jet.2013.12.004 84897062227 000335099600009 |
dc.rights.driver.fl_str_mv |
info:eu-repo/semantics/openAccess |
eu_rights_str_mv |
openAccess |
dc.format.none.fl_str_mv |
application/pdf |
dc.source.none.fl_str_mv |
reponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação instacron:RCAAP |
instname_str |
Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação |
instacron_str |
RCAAP |
institution |
RCAAP |
reponame_str |
Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
collection |
Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
repository.name.fl_str_mv |
Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação |
repository.mail.fl_str_mv |
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1799132016868851712 |