Lumpy Consumer Durables, Market Power, and Endogenous Business Cycles
Penn State Dept. of Econ. Working Paper No. 3-01-1
21 Pages Posted: 18 May 2001
There are 3 versions of this paper
Lumpy Consumer Durables, Market Power, and Endogenous Business Cycles
Lumpy Consumer Durables, Market Power, and Endogenous Business Cycles
Date Written: July 2003
Abstract
This paper shows that lumpy consumer durables and market power can generate endogenous cycles consistent with the facts. Past sales determine the current market size of durable goods. Larger past sales, ceteris paribus, thus naturally result in a smaller current market size and income. In this manner, the seeds of a downturn are sown in an upturn.
Keywords: Endogenous businesss cycles, Lumpy consumer durables, Credit constraint
JEL Classification: E32, E13, E51, D11, D42
Suggested Citation: Suggested Citation
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