The authors investigate the basic nominal stylized facts of business cycles in the United States, using monthly data from 1960:1 to 1993:4 and the methodology suggested by Kydland and Prescott (1990). They make comparisons among simple sum and Divisia aggregates, using the Thornton and Yue...

When the People's Republic of China joined the World Trade Organization in 2001, the US had to contend with an increasing economic trade deficit, as low-cost Chinese manufactured exports poured into its shores. China has since risen from the economic shambles following Mao's failed Cultural...

Can indirect network effects lead to adoption externalities? If so, when? We show that in markets where consumption benefits arise from hardware/software systems, adoption externalities will occur when there are (i) increasing returns to scale in the production of software, (ii) free entry in...

The conventional wisdom is that indirect network effects, unlike direct network effects, do not give rise to externalities. In this Paper we show that under very general conditions, indirect network effects lead to adoption externalities. In particular we show that in markets where consumption...

The conventional wisdom is that indirect network effects, unlike direct network effects, do not give rise to externalities. In this paper we show that under very general conditions, indirect network effects lead to adoption externalities. In particular we show that in markets where consumption...

When agents make their choices simultaneously, network effects often give rise to a selection problem involving perfectly coordinated, Pareto-optimal equilibria. We characterize this selection problem, and introduce a generalized sequential choice model to address it. In this model, we show how...