Does Utility Curvature Matter for Indeterminacy?

Abstract

Several recent papers have argued that it is more likely for indeterminacy to occur under a high intertemporal elasticity of substitution in consumption. This paper claims that this property does not generally hold in neoclassical growth models. We illustrate this claim by combining the features of those recent papers.

Keywords: Indeterminacy, Utility Curvature, Intertemporal Elasticity of Substitution in Consumption

JEL Classification: E00, E32