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Pavlov, Oscar; Weder, Mark - In: Journal of Economic Dynamics and Control 36 (2012) 4, pp. 629-641

Countercyclical markups are a key transmission mechanism in many endogenous business cycle models. Yet, recent findings … suggest that aggregate markups in the US are procyclical. The current model addresses this issue. It extends Galí's (1994 … cycles emerge with procyclical markups that are within empirically plausible ranges. …

Persistent link: https://www.econbiz.de/10011051990

Imitation by price and quantity setting firms in a differentiated market

Khan, Abhimanyu; Peeters, Ronald - In: Journal of Economic Dynamics and Control 53 (2015) C, pp. 28-36

We study the evolution of imitation behaviour in a differentiated market where firms are located equidistantly on a (Salop) circle. Firms choose price and quantity simultaneously, leaving open the possibility for non-market-clearing outcomes. The strategy of the most successful firm is imitated....

Persistent link: https://www.econbiz.de/10011209198

Optimal lending contracts with long run borrowing constraints

Li, Shuyun May - In: Journal of Economic Dynamics and Control 37 (2013) 5, pp. 964-983

This paper discusses two variations to the optimal lending contract under asymmetric information studied in Clementi and Hopenhayn (2006). One variation assumes that the entrepreneur is less patient than the bank, and the other assumes the bank has limited commitment. The qualitative properties...

Persistent link: https://www.econbiz.de/10010871004

Uncertainty and the trade-off between scale and flexibility in investment

Guthrie, Graeme - In: Journal of Economic Dynamics and Control 36 (2012) 11, pp. 1718-1728

This paper analyzes the behavior of a firm that chooses both the scale and timing of its investment. Sensitivity analysis shows that greater demand volatility is associated with the firm investing in larger increments, less frequently. This is in contrast to the conventional wisdom, which is...

Persistent link: https://www.econbiz.de/10010871049

Optimal harvesting of a spatial renewable resource

Behringer, Stefan; Upmann, Thorsten - In: Journal of Economic Dynamics and Control 42 (2014) C, pp. 105-120

In this paper we investigate the optimal harvesting of a renewable natural resource. While in most standard approaches the resource is located at a single point, we allow the resource to be distributed spatially. Consequently, an agent who exploits the resource has to travel from one location to...

Persistent link: https://www.econbiz.de/10010776904

Spatial externalities and agglomeration in a competitive industry

Brock, William A.; Xepapadeas, Anastasios; … - In: Journal of Economic Dynamics and Control 42 (2014) C, pp. 143-174

depends on the interactions between the structures of production technology and spatial effects as shown in the paper. No …

Persistent link: https://www.econbiz.de/10010776909

A statistical equilibrium model of competitive firms

Alfarano, Simone; Milaković, Mishael; Irle, Albrecht; … - In: Journal of Economic Dynamics and Control 36 (2012) 1, pp. 136-149

We find that the empirical density of firm profit rates, measured as returns on assets, is markedly non-Gaussian and reasonably well described by an exponential power (or Subbotin) distribution. We start from a statistical equilibrium model that leads to a stationary Subbotin density in the...

Persistent link: https://www.econbiz.de/10011051908

Innovate or Imitate? Behavioural technological change

Hommes, Cars; Zeppini, Paolo - In: Journal of Economic Dynamics and Control 48 (2014) C, pp. 308-324

We propose a behavioural model of technological change with evolutionary switching between costly innovators and free imitators, and study the endogenous interplay of innovation decisions, market price dynamics and technological progress. Innovation and imitation are strategic substitutes and...

Persistent link: https://www.econbiz.de/10011077519

Monetary policy and asset prices with belief-driven fluctuations

Airaudo, Marco; Cardani, Roberta; Lansing, Kevin J. - In: Journal of Economic Dynamics and Control 37 (2013) 8, pp. 1453-1478

We present a heterogeneous agents New-Keynesian model subject to a cost channel of monetary policy transmission. Constant turnover between long-time traders and newcomers in market activities, combined with restricted trading opportunities, introduces a feedback from the stock market to real...

Persistent link: https://www.econbiz.de/10010871043

Optimal Fiscal Policy with Labor Selection

Chugh, Sanjay K.; Lechthaler, Wolfgang; Merkl, Christian - In: Journal of Economic Dynamics and Control 94 (2018), pp. 142-189

This paper characterizes long-run and short-run optimal fiscal policy in the labor selection framework. In a calibrated non-Ramsey decentralized equilibrium, labor market volatility is inefficient. Keeping fixed the structural parameters, the Ramsey government achieves efficient labor market...

Persistent link: https://www.econbiz.de/10012490454

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