Sunspots in Endogenous Growth Two-Sector Models

Following J. Benhabib, K. Nishimura, T. Shigoka, 2008, in this paper we show how to construct a sunspot equilibrium near a steady state (resp. a closed orbit) in a continuous time economic model. We consider the case of a non Kaldorian-type economies for a tree-dimensional IS-LM model, as formulated by U. Neri and B. Venturi , 2007, and G. Bella, P. Mattana and B. Venturi, 2013. The system has a steady state with two stable and one unstable roots and a two-dimensional manifold closed orbit on which it is asymptotically stable, and the two-dimensional manifold is well located in an ambient space (a determinate parameters set). In our analysis we confirm that, as shown in literature, the construction of rational sunspot equilibrium comes from indeterminacy globally results. In other words, it could be done as a randomization over different equilibrium trajectories or equilibria, (as closed orbits). JEL classification C62, E32, O41