Chaos and capacity utilization under increasing returns to scale
AbstractAbstract It has been shown that adding variable capacity utilization of capital to a one-sector model with a mild production externality can produce local indeterminacy. In this paper, I provide a global analysis of this model and provide sufficient conditions for the existence of Euler equation branching. I show that this branching allows for regime switching equilibria implying [omega]-chaos and positive topological entropy - two notions of chaotic behavior.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Economic Behavior & Organization.
Volume (Year): 77 (2011)
Issue (Month): 2 (February)
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Web page: http://www.elsevier.com/locate/jebo
Variable capacity utilization Increasing returns to scale Externality Indeterminacy Cycles Chaos Euler equation branching Regime switching [omega]-Chaos Topological entropy;
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