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A Three-Good Overlapping-Generations General Equilibrium Efficient Business Cycle Model

Author

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  • JULAN DU

    (Department of Economics, The Chinese University of Hong Kong, Shatin, N.T., Hong Kong, China)

Abstract

This paper presents an overlapping-generations general equilibrium model of efficient business cycles. It considers three types of goods in an economy: primary goods, intermediate goods and final goods. It shows that complete division of labour with business cycles and unemployment can be the Pareto optimal regime. It also sheds light on the transmission of business cycles between sectors and across economies.

Suggested Citation

  • Julan Du, 2006. "A Three-Good Overlapping-Generations General Equilibrium Efficient Business Cycle Model," Division of Labor & Transaction Costs (DLTC), World Scientific Publishing Co. Pte. Ltd., vol. 1(02), pages 127-162.
    • Handle: RePEc:wsi:dltcxx:v:01:y:2006:i:02:n:s021987110600010x
    DOI: 10.1142/S021987110600010X
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    References listed on IDEAS

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    1. Victor Zarnowitz, 1992. "Business Cycles: Theory, History, Indicators, and Forecasting," NBER Books, National Bureau of Economic Research, Inc, number zarn92-1, March.
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    More about this item

    Keywords

    Efficient business cycles; durable goods; nondurable goods; division of labour; specialized learning by doing; unemployment;
    All these keywords.

    JEL classification:

    • C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium
    • D - Microeconomics
    • E1 - Macroeconomics and Monetary Economics - - General Aggregative Models
    • F - International Economics
    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade
    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • L - Industrial Organization
    • O - Economic Development, Innovation, Technological Change, and Growth

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