This paper investigates the aggregate fluctuations in production and demand components when a firm's investment … equilibrium model in which a firm's investment is lumpy and strategically complement with each other (Nirei, Journal of Economic … Theory, forthcoming). In this paper we explore the possibility of such a bottom-up fluctuation which is driven by the …

Growth rates of macro aggregates are more persistent than technology growth in data. We develop a theory that accounts …

This paper proposes a model of endogenous fluctuations in investment. A monopolistic producer has an incentive to … invest when the aggregate demand is high. This causes a propagation of investment across sectors. When the investment follows … of the propagation size, and show that its variance can be large enough to match the observed investment fluctuations. We …

discrete time stochastic recursive algorithm using extension of the Freidlin and Wentzell (1998) large deviations theory by … Dupuis and Kushner (1989). This theory allows one to derive the escape time and the dominant escape path for discrete time … of shocks in discrete time. It allows us to use well-developed theory of large deviations for continuous time processes …