Models with increasing returns to scale

General DSGE Modeling
1

Hi Prof. Pfeifer and to all,
I have a theoretical question. It is well known that for standard real business cycle (RBC) models with constant returns a unique solution exists. It is possible the existence of a unique stable solution in dsge models with increasing returns to scale (due to production externalities) ?
Thank you,
Leonid

2

I am not sure I understand the question. Do you want to solve models featuring indeterminacy? Or is your question whether model with increasing returns to scale have a unique solution?

3

Hi Prof. Pfeifer,
Yes, my question is whether model with increasing returns to scale have a unique solution.
Thank you,
Leonid

4

AFAIK the typically do not have a unique solution. But there may be model features/parameterizations where you may obtain a unique solution.

5

Thank you Professor.