Huang, Kevin x.d.; Volkan, Engin; Yazgan, M. ege - Vanderbilt University Department of Economics - 2013
We argue that nonhomothetic preferences with habit formation in nondurable and durable consumption can be a driving force behind sectoral comovement in production. We make this point by augmenting a two-sector New Keyesian model a la Barsky, House and Kimball (2007) with these two real features...