In most manufacturing industries output is adjusted in a lumpy way along three margins: shiftwork, weekend work, and closing a plant temporarily down. We incorporate such decisions into a dynamic general equilibrium model and study: (i) if such micro-level nonconvexities magnify business cycles;...

The article considers the adjustment toward long-run equilibrium within the Duménil and Lévy macro model, with modifications. Findings show that long-run convergence to fully adjusted positions with normal utilization is not achieved when a more realistic reaction function is proposed....