Instabilities in concave, dynamic, economic optimization

An important and numerous literature argues that nonconcavity (often convex ity with respect to the state) of the Hamiltonian leads to multiple steady states, instability, and a threshold. This threshold property provides a po werful paradigm to explain history dependency and hysteresis. This paper sh ows that economically relevant properties tin particular, multiple steady s tates and thresholds) are possible in strict concave models too. Two corres ponding necessary conditions with intuitive economic interpretation are der ived.