The stability of cyclical growth within the context of a model in Matsuyama (1999) is examined. It is shown that but for an extreme situation, the two-cycles are unique and a range of parameter values which imply the stability of such cyclical growth is derived. The growth enhancing property of...

This paper analyses two types of models: 1. Those based on assumptions of monetary and financial market equilibrium disturbance in line with mainstream thinking that there is self-regulating market, the units would have rational expectations, and the crisis would be a temporary phenomenon caused...

This paper identifies a new mechanism leading to inefficiency in capital reallocation at theextensive margin when an economy experiences a sectoral boom. I argue that imperfectionsin the financial market and capital barriers to entry in the booming sector create amisallocation of managerial...

In the last few decades, real GDP growth and investment in advanced countries have declined in tandem. This slowdown was not the result of weak demand (there has been no shift along the Okun curve), but of a decline in potential output growth (which has shifted the Okun curve to the left). We...

In this paper, I present a multi-sectoral DSGE-model with housing, real rigidities and variable capital utilization that generates aggregate and sectoral co-movements due to sector specific shocks. Furthermore, the model accounts for two puzzles: First, residential investment correlates...

The purpose of the paper is two-fold: (i) to construct and analyze a novel endogenous growth model, in which unbounded growth is possible without the need to assume increasing returns to scale, and (ii) to use the model to estimate the long-run (or dynamic) costs of recessions. In our model,...

Intangible capital is an important factor of production in modern economies that is generally neglected in business cycle analyses. We demonstrate that intangible capital can have a substantial impact on business cycle dynamics, especially if the intangible is complementary with production...

Can we use neoclassical growth model to single out the important transmission channels through which external factors or "primitives" affected the Indian economy and caused the remarkable growth of the period 1982-2002? In this paper, we answer the question by applying the new technique of...

The paper shows that US GDP velocity of M1 money has exhibited long cycles around a 1.25% per year upward trend, during the 1919-2004 period. It explains the velocity cycles through shocks constructed from a DSGE model and annual time series data (Ingram et al., 1994). Model velocity is stable...