We study an endogenous business cycle model with Cournotian monopolistic competition and an endogenous number of firms in each sector. Our model is a simple general equilibrium macroeconomic model introducing overlapping generation both of consumers and firms. Firms strategically decide on...

This is a specific investigation of the importance of technological change specific to new investment goods for postwar U.S. aggregate fluctuations. A growth model that incorporates this form of technological change is calibrated to U.S. data and simulated, using the relative price of new...

Empirical research indicates that distributed lag specifications perform well in describing aggregate investment. Such specifications are typically rationalized through the assumption of convex adjustment costs that imply smooth partial adjustment of capital. However, much of the capital stock...

Employment of apprentices seems to follow the business cycle. An interesting question is whether this is based on an investment policy where firms recruit when the labour market indicates skill shortage. Alternatively it may be that the firms are myopic and basically hire apprentices in booming...

Over the period 1972-1986, the correlations of GDP, employment and investment between the United States and an aggregate of Europe, Canada and Japan were respectively 0.76, 0.66, and 0.63. For the period 1986 to 2000 the same correlations were much lower: 0.26, 0.03, and -0.07 (real...

Many quantitative studies have shown a stylised fact that fluctuations in business fixed investment dominate the business cycle pattern. The dynamics of the investment process have historically been seen as important elements of capital formation and economic progress. Why is it then that...

Proposal: Treat profits and losses symmetrically so that the taxing authority shares in losses in the same proportion as it shares in profits. Just as companies making profits pay a share of those profits in taxes, companies make losses would receive a subsidy or negative tax from the government...