shape competition by investing into production capacity while being subject to unexpected demand shocks with persistence …. The model shows that a negative demand shock can facilitate cartel formation despite lowering collusive profits. This is … because lower demand reduces capacity utilization and makes competition more intense especially when capacities are durable …

effective demand in a growth context, by which a permanent demand shock has a permanent growth effect, is consistent with the … Nachfrage für die US-amerikanische verarbeitende Industrie. Im Wachstumskontext besagt das Prinzip der effektiven Nachfrage …

who invest into production capacity, sell a near-homogeneous good, and are subject to unexpected demand shocks with … persistence. The firms either compete or collude in prices. The model shows that a reduction of demand may promote collusion … despite lowering collusive profits. This is the case when capacities are durable and a perceptible decline in demand creates …

This study analyzes the impact of supply and demand shocks on income and price inequality in the economy using data … from Korea. First, supply and demand shocks are identified from output and price data in Korea using the methods found in … demand shocks significantly worsen the income distribution. It is estimated that the effect of the demand shock is long …

In this paper we verify the functioning of the standard neoclassical adjustment to equilibrium after a demand shock in … guaranteed. We show that the size of the demand shock determines the nature and number of equilibria generated by strategic …