Indeterminacy in a model with sector-specific externalities

I examine a model with two sectors of production: consumption and investment. In the model, indeterminacy of equilibria results due to the presence of small sector-specific externalities in production. In fact, I find that indeterminacy results with a certain, minimum value of the externality in the investment sector, even with no externality in the consumption sector. I find that the indeterminacy properties of the model vary, depending on the form of the utility function. For example, with utility that is logarithmic in consumption, these properties are completely independent of the value of the externality in the consumption sector. (C) 2001 Elsevier Science B.V. All rights reserved.