Format:
1 Online-Ressource (17 p)
Content:
Zhang [Tariff and Equilibrium Indeterminacy, shows that endogenous tariffs (or energy taxes) and endogenous labor income taxes are equivalent in generating local indeterminacy. Using methods developed by Stockman [Journal of Economic Theory 145 (2010), 1060-1085], we extend Zhang's analysis to prove that endogenous tariffs and endogenous labor income taxes are also equivalent in generating global indeterminacy (chaotic equilibria) under a balanced-budget rule. More precisely, we show that the existence of Euler equation branching in an arbitrarily small neighborhood of a steady state can imply topological chaos in the sense of Devaney. In addition, Euler equation branching occurs regardless of the local uniqueness of the equilibrium around the steady state
Note:
In: Macroeconomic Dynamics, Vol. 16, No. S3, 2012
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Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments November 1, 2012 erstellt
Language:
English
