A Simple Business-Cycle Model with Shumpeterian Features
AbstractWe develop a dynamic general equilibrium model of imperfect competition where a sunk cost of creating a new product regulates the type of entry that dominates in the economy: new products or more competition in existing industries. Considering the process of product innovation is irreversible, introduces hysteresis in the business cycle. Expansionary shocks may lead the economy to a new 'prosperity plateau,' but contractionary shocks only affect the market power of mature industries.
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Bibliographic InfoPaper provided by Cardiff University, Cardiff Business School, Economics Section in its series Cardiff Economics Working Papers with number E2007/28.
Length: 45 pages
Date of creation: Oct 2007
Date of revision:
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Entry; Hysteresis; Mark-up;
Other versions of this item:
- Luis F. Costa & Huw D. Dixon, 2007. "A Simple Business-Cycle Model with Schumpeterian Features," Money Macro and Finance (MMF) Research Group Conference 2006 105, Money Macro and Finance Research Group.
- Luis F Costa & Huw D Dixon, . "A Simple Business-Cycle Model with Schumpeterian Features," Discussion Papers 05/30, Department of Economics, University of York.
- Luís Costa & Huw Dixon, 2005. "A Simple Business-cycle Model with Schumpeterian Features," Working Papers 2005/16, Department of Economics at the School of Economics and Management (ISEG), Technical University of Lisbon..
- E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
- L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-10-20 (All new papers)
- NEP-BEC-2007-10-20 (Business Economics)
- NEP-DGE-2007-10-20 (Dynamic General Equilibrium)
- NEP-MAC-2007-10-20 (Macroeconomics)
- NEP-MIC-2007-10-20 (Microeconomics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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2010/14, Department of Economics at the School of Economics and Management (ISEG), Technical University of Lisbon..
- Brito, Paulo & Costa, Luís F. & Dixon, Huw, 2008. "Non-smooth Dynamics and Multiple Equilibria in a Cournot-Ramsey Model with Endogenous Markups," Cardiff Economics Working Papers E2008/21, Cardiff University, Cardiff Business School, Economics Section, revised Jul 2010.
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2009/25, Department of Economics at the School of Economics and Management (ISEG), Technical University of Lisbon..
- Costa, Luís F. & Dixon, Huw David, 2010. "Fiscal policy under imperfect competition: A survey," Economics Discussion Papers 2010-14, Kiel Institute for the World Economy.
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