Report
Chaos, sunspots, and automatic stabilizers
Harrison, Sharon G.; Christiano, Lawrence J. (1996)
We study a one-sector growth model which is standard except for the presence of an externality in the production function. The set of competitive equilibria is large. It includes constant equilibria, sunspot equilibria, cyclical and chaotic equilibria, and equilibria with deterministic or stochastic regime switching. The efficient allocation is characterized by constant employment and a constant growth rate. We identify an income tax-subsidy schedule that supports the efficient allocation as the unique equilibrium outcome. That schedule has two properties: (i) it specifies the tax rate to be ...
Staff Report , Paper 214

Working Paper
Chaos, sunspots, and automatic stabilizers
Harrison, Sharon G.; Christiano, Lawrence J. (1996)
We study a one-sector growth model which is standard except for the presence of an externality in the production function. The set of competitive equilibria is large. It includes constant equilibria, sunspot equilibria, cyclical and chaotic equilibria, and equilibria with deterministic or stochastic regime switching. The efficient allocation is characterized by constant employment and a constant growth rate. We identify an income tax-subsidy schedule that supports the efficient allocation as the unique equilibrium outcome. That schedule has two properties: (i) it specifies the tax rate to be ...
Working Paper Series, Macroeconomic Issues , Paper WP-96-16

Journal Article
A methodological approach to chaos: are economists missing the point?
Butler, Alison (1990-03)
Review , Issue Mar , Pages 36-48

Working Paper
Fiscal policy, increasing returns, and endogenous fluctuations
Lansing, Kevin J.; Guo, Jang-Ting (1999)
We examine the quantitative implications of government fiscal policy in a discrete-time one-sector growth model with a productive externality that generates social increasing returns to scale. Starting from a laissez-faire economy that exhibits an indeterminate steady state (a sink), we show that the introduction of a constant capital tax or subsidy can lead to various forms of endogenous fluctuations, including stable 2-, 4-, 8-, and 10- cycles, quasi-periodic orbits, and chaos. In contrast, a constant labor tax or subsidy has no effect on the qualitative nature of the model's dynamics. ...
Working Papers in Applied Economic Theory , Paper 99-08