arbiter
JournalsAccount

Indeterminacy, maintenance expenditures and capital-labour substitution elasticity

Dou Jiang

Journal of Economic Research2019article
ABDC B
Weight
0.26

Abstract

Recent research in macroeconomics has focused on the possibility of indeterminacy since a model with indeterminacy can generate business cycles that are driven by sunspots. However, most of existing works in this area build on the Cobb-Douglas production function, which seems not empirically plausible. This paper departs from unitary values for the elasticity of capital-labour substitution in production and investigates the role of capital-labour substitution elasticity on the occurrence of indeterminacy. I show that in a two-sector model with maintenance expenditures, the minimum degree of externalities required for indeterminacy is much lower than its one-sector predecessor. Moreover, results show that indeterminacy may still occur when the elasticity of labour supply is within the range of empirical plausibility.

Cite this paper

@article{dou2019,
  title        = {{Indeterminacy, maintenance expenditures and capital-labour substitution elasticity}},
  author       = {Dou Jiang},
  journal      = {Journal of Economic Research},
  year         = {2019},
}

Paste directly into BibTeX, Zotero, or your reference manager.

Flag this paper

Indeterminacy, maintenance expenditures and capital-labour substitution elasticity

Flags are reviewed by the Arbiter methodology team within 5 business days.

Evidence weight

0.26

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.00 × 0.4 = 0.00
M · momentum0.20 × 0.15 = 0.03
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.