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Multiple Equilibria, History Dependence, and Global Dynamics in Intertemporal Optimization Models

This paper examines mechanisms that can generate multiple optimal equilibria in efficient deterministic intertemporal optimization models. It discusses the properties of thresholds separating the basins of attraction of different equilibria. Since thresholds cannot always be found analytically, the paper presents three numerical methods to compute and analyze them. It also provides an overview of efficient dynamic economic models with multiple equilibria.

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0% found this document useful (0 votes)
19 views36 pages

Multiple Equilibria, History Dependence, and Global Dynamics in Intertemporal Optimization Models

This paper examines mechanisms that can generate multiple optimal equilibria in efficient deterministic intertemporal optimization models. It discusses the properties of thresholds separating the basins of attraction of different equilibria. Since thresholds cannot always be found analytically, the paper presents three numerical methods to compute and analyze them. It also provides an overview of efficient dynamic economic models with multiple equilibria.

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Working Paper No.

57

Multiple Equilibria, History Dependence, and


Global Dynamics in Intertemporal
Optimization Models

by

Christophe Deissenberg, Gustav Feichtinger, Willi Semmler


and Franz Wirl

University of Bielefeld
Department of Economics
Center for Empirical Macroeconomics
P.O. Box 100 131
33501 Bielefeld, Germany
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