Lumpy consumer durables, market power, and endogenous business cycles

In this paper we show 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.

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Year of publication:	2004
Authors:	Krishna, Kala ; Yavas, Cemile
Published in:	Canadian Journal of Economics. - Canadian Economics Association - CEA. - Vol. 37.2004, 2, p. 375-391
Publisher:	Canadian Economics Association - CEA

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Extent:	application/pdf
Type of publication:	Article
Notes:	Published
Classification:	E32 - Business Fluctuations; Cycles ; E13 - Neoclassical
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005770364