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A Simple Business-Cycle Model with Shumpeterian Features Author info | Abstract | Publisher info | Download info | Related research | Statistics Costa, Luís F.
Dixon, Huw () (Cardiff Business School)
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registered author(s):
We 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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Paper provided by Cardiff University, Cardiff Business School, Economics Section in its series Cardiff Economics Working Papers with number
E2007/28.
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Length: 45 pages
Date of creation: Oct 2007Date of revision:
Handle: RePEc:cdf:wpaper:2007/28Contact details of provider: Postal: Aberconway Building, Colum Drive, CARDIFF, CF10 3EU Phone: +44 (0) 29 20874417 Fax: +44 (0) 29 20874419 Web page: http://www.cardiff.ac.uk/carbs/econ/index.html More information through EDIRC
For technical questions regarding this item, or to correct its listing, contact: (Bruce Webb).
Keywords: Entry ; Hysteresis ; Mark-up ; Other versions of this item:
Paper Luis F Costa & Huw D Dixon, .
"A Simple Business-Cycle Model with Schumpeterian Features ,"
Discussion Papers
05/30, Department of Economics, University of York.
[Downloadable!] 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.
[Downloadable!] 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..
[Downloadable!] Find related papers by JEL classification: 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 :
References listed on IDEAS 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.: Luis Costa, 2004.
"Endogenous markups and fiscal policy ,"
Money Macro and Finance (MMF) Research Group Conference 2003
18, Money Macro and Finance Research Group.
[Downloadable!]
Other versions:
Luís F. Costa, 2001.
"Endogenous Markups and Fiscal Policy ,"
Working Papers
2001/06, Department of Economics at the School of Economics and Management (ISEG), Technical University of Lisbon..
[Downloadable!] Luís F. Costa, 2004.
"Endogenous Markups and Fiscal Policy ,"
Manchester School ,
University of Manchester, vol. 72(s1), pages 55-71, 09.
[Downloadable!] (restricted) Bipasa Datta & Huw Dixon, 2002.
"Technological Change, Entry, and Stock-Market Dynamics: An Analysis of Transition in a Monopolistic Industry ,"
American Economic Review ,
American Economic Association, vol. 92(2), pages 231-235, May.
[Downloadable!]
Blanchard, Olivier Jean & Kiyotaki, Nobuhiro, 1987.
"Monopolistic Competition and the Effects of Aggregate Demand ,"
American Economic Review ,
American Economic Association, vol. 77(4), pages 647-66, September.
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Satyajit Chatterjee & Russell W. Cooper & B. Ravikumar, 1993.
"Strategic complementarity in business formation: aggregate fluctuations and sunspot equilibria ,"
Working Papers
93-9, Federal Reserve Bank of Philadelphia.
Other versions: Gali Jordi, 1994.
"Monopolistic Competition, Business Cycles, and the Composition of Aggregate Demand ,"
Journal of Economic Theory ,
Elsevier, vol. 63(1), pages 73-96, June.
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Other versions:
Gali, J., 1991.
"Monopolistic Competition, Business Cycles and the Composition of Aggregate Demand ,"
Papers
92-03, Columbia - Graduate School of Business.
Jordi Galí, 1993.
"Monopolistic Competition, Business Cycles, and the Composition of Aggregate Demand ,"
Economics Working Papers
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[Downloadable!] Devereux, Michael B & Head, Allen C & Lapham, Beverly J, 1996.
"Monopolistic Competition, Increasing Returns, and the Effects of Government Spending ,"
Journal of Money, Credit and Banking ,
Blackwell Publishing, vol. 28(2), pages 233-54, May.
[Downloadable!] (restricted)
Other versions: Philippe Aghion & Richard Blundell & Rachel Griffith & Peter Howitt & Susanne Prantl, 2004.
"Entry and Productivity Growth: Evidence from Microlevel Panel Data ,"
Journal of the European Economic Association ,
MIT Press, vol. 2(2-3), pages 265-276, 04/05.
[Downloadable!] (restricted)
Julio J. Rotemberg & Michael Woodford, 1999.
"The Cyclical Behavior of Prices and Costs ,"
NBER Working Papers
6909, National Bureau of Economic Research, Inc.
[Downloadable!] (restricted)
Other versions:
Rotemberg, Julio J. & Woodford, Michael, 1999.
"The cyclical behavior of prices and costs ,"
Handbook of Macroeconomics ,
in: J. B. Taylor & M. Woodford (ed.), Handbook of Macroeconomics, edition 1, volume 1, chapter 16, pages 1051-1135
Elsevier.
[Downloadable!] (restricted) d'Aspremont, Claude & Dos Santos Ferreira, Rodolphe & Gerard-Varet, Louis-Andre, 1997.
"General Equilibrium Concepts under Imperfect Competition: A Cournotian Approach ,"
Journal of Economic Theory ,
Elsevier, vol. 73(1), pages 199-230, March.
[Downloadable!] (restricted)
Other versions:
D'Aspremont, C. & Dos Santos Ferreira, R. & Gerard-Varet, L.A., 1992.
"General Equilibrium Concepts Under Imperfect Competition: A Cournotien Approach ,"
G.R.E.Q.A.M.
92a03, Universite Aix-Marseille III.
D'ASPREMONT, Claude & DOS SANTOS , R. & GƒRARD-VARET, Louis-AndrŽ, 1992.
"General equilibrium concepts under imperfect competition: a Cournotion approach ,"
CORE Discussion Papers
1992057, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
Costa, Luis F, 2001.
"Can Fiscal Policy Improve Welfare in a Small Dependent Economy with Feedback Effects ,"
Manchester School ,
University of Manchester, vol. 69(4), pages 418-39, September.
[Downloadable!] (restricted)
Startz, Richard, 1989.
"Monopolistic Competition as a Foundation for Keynesian Macroeconomic Models ,"
The Quarterly Journal of Economics ,
MIT Press, vol. 104(4), pages 737-52, November.
[Downloadable!] (restricted)
Julio J. Rotemberg & Michael Woodford, 1995.
"Modèles d'équilibre général dynamiques en concurrence imparfaite ,"
Annales d'Economie et de Statistique ,
ADRES, issue 37-38, pages 18, Janvier-J.
[Downloadable!]
Mark Bils & Peter J. Klenow, 2001.
"The Acceleration of Variety Growth ,"
American Economic Review ,
American Economic Association, vol. 91(2), pages 274-280, May.
[Downloadable!] (restricted)
Heijdra, Ben J & van der Ploeg, Frederick, 1996.
"Keynesian Multipliers and the Cost of Public Funds under Monopolistic Competition ,"
Economic Journal ,
Royal Economic Society, vol. 106(438), pages 1284-96, September.
[Downloadable!] (restricted)
Dixon, Huw & Lawler, Phillip, 1996.
" Imperfect Competition and the Fiscal Multiplier ,"
Scandinavian Journal of Economics ,
Blackwell Publishing, vol. 98(2), pages 219-31, June.
Heijdra, Ben J, 1998.
"Fiscal Policy Multipliers: The Role of Monopolistic Competition, Scale Economies, and Intertemporal Substitution in Labour Supply ,"
International Economic Review ,
Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 39(3), pages 659-96, August.
Dixit, Avinash K & Stiglitz, Joseph E, 1977.
"Monopolistic Competition and Optimum Product Diversity ,"
American Economic Review ,
American Economic Association, vol. 67(3), pages 297-308, June.
[Downloadable!] (restricted)
Other versions: Joaquim Oliveira Martins & Stefano Scarpetta, 1999.
"The Levels and Cyclical Behaviour of Mark-ups Across Countries and Market Structures ,"
OECD Economics Department Working Papers
213, OECD, Economics Department.
[Downloadable!]
Full
references Cited by : (explanations , 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.)
Luís Costa, 2006.
"Entry and fiscal policy effectiveness in a small open economy within a Monetary Union ,"
Portuguese Economic Journal ,
Springer, vol. 5(1), pages 45-65, May.
[Downloadable!] (restricted)
Luís F. Costa & Huw Dixon, 2009.
"Fiscal Policy under Imperfect Competition: A Survey ,"
Working Papers
2009/25, Department of Economics at the School of Economics and Management (ISEG), Technical University of Lisbon..
[Downloadable!]
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.
[Downloadable!]
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