Melitz, Marc J.; Ghironi, Fabio; Bilbiie, Florin O. - Society for Economic Dynamics - SED - 2007
We study the efficiency properties of a dynamic, stochastic, general equilibrium, macroeconomic model with monopolistic competition and firm entry subject to sunk costs, a time-to-build lag, and exogenous risk of firm destruction. Under inelastic labor supply and linearity of production in...