We study the cyclical effects of the timing of durable goods purchases in a general equilibrium model in which both durable and non-durable goods are consumed and the durable good is lumpy. At the microeconomic level, the timing of durable goods purchases supplies some insulation for non-durable...

We study the cyclical effects of the timing of durable goods purchases in a general equilibrium model in which both durable and non-durable goods are consumed and the durable good is lumpy. At the microeconomic level, the timing of durable goods purchases supplies some insulation for nondurable...

The authors present a model in which sectoral shocks have aggregate consequences. The model relies on irreversible investment and imperfect information to slow the adjustment of expanding industries. The authors show that this gradual expansion is suboptimal. Copyright 1993 by The Review of...