A Simple Business-Cycle Model with Schumpeterian 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 Department of Economics, University of York in its series Discussion Papers with number 05/30.
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Entry; hysteresis; mark-up;
Other versions of this item:
- Costa, Luís F. & Dixon, Huw, 2007. "A Simple Business-Cycle Model with Shumpeterian Features," Cardiff Economics Working Papers E2007/28, Cardiff University, Cardiff Business School, Economics Section.
- 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.
- Luís Costa & Huw Dixon, 2005. "A Simple Business-cycle Model with Schumpeterian Features," Working Papers Department of Economics 2005/16, ISEG - School of Economics and Management, Department of Economics, 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-2005-10-15 (All new papers)
- NEP-COM-2005-10-15 (Industrial Competition)
- NEP-DGE-2005-10-15 (Dynamic General Equilibrium)
- NEP-ENT-2005-10-15 (Entrepreneurship)
- NEP-MAC-2005-10-15 (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.:
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