Admiration is a source of indeterminacy

Been Lon Chen*, Mei Hsu

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

24 Citations (Scopus)


Are consumption externalities sources of indeterminacy? The answer is negative in conventional wisdom. This paper shows consumption externalities establish local indeterminacy if the degree of decreasing impatience is sufficiently large. Dynamic models with indeterminacy are valuable as they tend to explain economic fluctuations without relying on exogenous shocks and question interpretation of simple estimation obtained by pooling data, among others.

Original languageEnglish
Pages (from-to)96-103
Number of pages8
JournalEconomics Letters
Issue number1
Publication statusPublished - 2007 Apr
Externally publishedYes


  • Consumption externalities
  • Indeterminacy
  • Neoclassical growth model

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics


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