We develop a stylized two-sector business cycle model with endogenous firm dynamics in the investment goods sector. The positive correlation between firms' profitability and the relative price of investment goods generates an endogenous persistence mechanism in productivity dynamics which drives...

The paper surveys the evolution of modern macroeconomic models with the focus on the interrelations between endogenous growth and cyclical fluctuations. After reviewing models of the business cycle and endogenous growth, the paper discusses literature combining elements of both of them.

This paper studies an agent-based model that bridges Keynesian theories of demandgeneration and Schumpeterian theories of technology-fueled economic growth. We employ the model to investigate the properties of macroeconomic dynamics and the impact of public polices on supply, demand and the...