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idea in a general equilibrium model with endogenous price flexibility and entry-exit. Faced with higher productivity … uncertainty, firms set prices more flexibly. This improves their resilience, reducing exit and output losses in response to …
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' inflation aversion and exit costs. …
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defines an optimal firm size. Changes to the number of firms is subject to adjustment costs, so that the entry dynamics is …
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This paper develops a 9-dimensional SVAR to investigate the sources of the U.S. business cycle. We extend the standard set of identified shocks to include unexpected changes in commodity prices. Our main result is that commodity price shocks are a very important driving force of macroeconomic...
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