The Welfare Cost of Business Cycles in an Economy with Nonclearing Markets
AbstractIn this paper we measure the welfare cost of fluctuations in a simple representative agent economy with nonclearing markets. The market friction we consider involves price rigidities and a voluntary exchange rationing scheme. These features are incorporated into an otherwise standard neoclassical growth model. We show that the frictions we introduce make the losses from fluctuations much bigger than in a frictionless environment.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Society for Economic Dynamics in its series 2004 Meeting Papers with number 570.
Date of creation: 2004
Date of revision:
Contact details of provider:
Postal: Society for Economic Dynamics Christian Zimmermann Economic Research Federal Reserve Bank of St. Louis PO Box 442 St. Louis MO 63166-0442 USA
Web page: http://www.EconomicDynamics.org/society.htm
More information through EDIRC
Cost of Business Cycles -- Nonclearing Markets -- Dynamic General Equilibrium;
Other versions of this item:
- Portier Franck & Puch Luis A., 2007. "The Welfare Cost of Business Cycles in an Economy with Nonclearing Markets," The B.E. Journal of Macroeconomics, De Gruyter, vol. 6(3), pages 1-16, January.
- Portier, Franck & Puch, Luis, 2004. "The Welfare Cost of Business Cycles in an Economy with Non-Clearing Markets," CEPR Discussion Papers 4799, C.E.P.R. Discussion Papers.
- Frank Portier & Luis A. Puch, 2004. "The Welfare Cost of Business Cycles in an Economy with Nonclearing Markets," Documentos del Instituto Complutense de AnÃ¡lisis EconÃ³mico 0403, Universidad Complutense de Madrid, Facultad de Ciencias Económicas y Empresariales.
- Franck Portier & Luis A. Puch, . "The Welfare Cost of Business Cycles in an Economy with Nonclearing Markets," Working Papers 2005-18, FEDEA.
- E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
- C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques
- C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-08-02 (All new papers)
- NEP-DGE-2004-08-02 (Dynamic General Equilibrium)
- NEP-MAC-2004-08-02 (Macroeconomics)
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.:
- Andrew Atkeson & Christopher Phelan, 1994.
"Reconsidering the Costs of Business Cycles with Incomplete Markets,"
in: NBER Macroeconomics Annual 1994, Volume 9, pages 187-218
National Bureau of Economic Research, Inc.
- Andrew Atkeson & Christopher Phelan, 1994. "Reconsidering the Costs of Business Cycles with Incomplete Markets," NBER Working Papers 4719, National Bureau of Economic Research, Inc.
- Per Krusell & Anthony A. Smith, Jr., 1999.
"On the Welfare Effects of Eliminating Business Cycles,"
Review of Economic Dynamics,
Elsevier for the Society for Economic Dynamics, vol. 2(1), pages 245-272, January.
- Per Krusell & Anthony A. Smith, Jr., . "On the Welfare Effects of Eliminating Business Cycles," GSIA Working Papers 243, Carnegie Mellon University, Tepper School of Business.
- Imrohoruglu, Ayse, 1989. "Cost of Business Cycles with Indivisibilities and Liquidity Constraints," Journal of Political Economy, University of Chicago Press, vol. 97(6), pages 1364-83, December.
- Benassy, Jean-Pascal, 1993. "Nonclearing Markets: Microeconomic Concepts and Macroeconomic Applications," Journal of Economic Literature, American Economic Association, vol. 31(2), pages 732-61, June.
- Epstein, Larry G & Zin, Stanley E, 1991. "Substitution, Risk Aversion, and the Temporal Behavior of Consumption and Asset Returns: An Empirical Analysis," Journal of Political Economy, University of Chicago Press, vol. 99(2), pages 263-86, April.
- Anne Epaulard & Aude Pommeret, 2003.
"Recursive Utility, Endogenous Growth, and the Welfare Cost of Volatility,"
Review of Economic Dynamics,
Elsevier for the Society for Economic Dynamics, vol. 6(3), pages 672-684, July.
- Aude Pommeret & Anne Epaulard, 2001. "Recursive Utility, Endogenous Growth, and the Welfare Cost of Volatility," IMF Working Papers 01/5, International Monetary Fund.
- Pedro N. Rodríguez, & Simón Sosvilla-Rivero, 2006. "Understanding and Forecasting Stock Price Changes," Working Papers 2006-03, FEDEA.
- Gadi Barlevy, 2005. "The cost of business cycles and the benefits of stabilization," Economic Perspectives, Federal Reserve Bank of Chicago, issue Q I, pages 32-49.
- Andrés J. Marchante Mera & Bienvenido Ortega Aguaza & José Sánchez Maldonado, 2006. "Las dimensiones del bienestar en las Comunidades Autónomas Españolas. Un análisis de Sigma y Gamma-Convergencia," Working Papers 2006-05, FEDEA.
- Mittnik, Stefan & Semmler, Willi, 2012. "Regime dependence of the fiscal multiplier," Journal of Economic Behavior & Organization, Elsevier, vol. 83(3), pages 502-522.
- Gadi Barlevy, 2004. "The Cost of Business Cycles and the Benefits of Stabilization: A Survey," NBER Working Papers 10926, National Bureau of Economic Research, Inc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Christian Zimmermann).
If references are entirely missing, you can add them using this form.