IDEAS home Printed from https://ideas.repec.org/a/bla/ijethy/v8y2012i3p313-319.html

On expectations-driven business cycles in economies with production externalities: A comment

Author

Listed:
  • Jang-Ting Guo
  • Anca-Ioana Sirbu
  • Richard M.H. Suen

Abstract

Eusepi (2009, International Journal of Economic Theory 5, pp. 9-23) analytically finds that a one-sector real business cycle model may exhibit positive co-movement between consumption and investment when the equilibrium wage-hours locus is positively-sloped and steeper than the household's labor supply curve. However, we show that this condition does not imply expectations-driven business cycles will emerge in Eusepi's model. Specifically, a positive news shock about future productivity improvement leads to an aggregate recession whereby output, employment, consumption and investment all fall in the announcement period.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Jang-Ting Guo & Anca-Ioana Sirbu & Richard M.H. Suen, 2012. "On expectations-driven business cycles in economies with production externalities: A comment," International Journal of Economic Theory, The International Society for Economic Theory, vol. 8(3), pages 313-319, September.
    • Handle: RePEc:bla:ijethy:v:8:y:2012:i:3:p:313-319
    DOI: j.1742-7363.2012.00193.x
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1111/j.1742-7363.2012.00193.x
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/j.1742-7363.2012.00193.x?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or

    for a different version of it.

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Paul Beaudry & Franck Portier, 2014. "News-Driven Business Cycles: Insights and Challenges," Journal of Economic Literature, American Economic Association, vol. 52(4), pages 993-1074, December.
    2. Kazuo Nishimura & Myrna Wooders & Makoto Yano, 2013. "Macroeconomic dynamics and its micro foundation: A special issue in honor of Cuong Le Van," International Journal of Economic Theory, The International Society for Economic Theory, vol. 9(1), pages 1-3, March.
    3. Guo, Jang-Ting & Sirbu, Anca-Ioana & Weder, Mark, 2015. "News about aggregate demand and the business cycle," Journal of Monetary Economics, Elsevier, vol. 72(C), pages 83-96.
    4. Kazuo Mino, 2017. "Sunspot-Driven Business Cycles: An Overview," KIER Working Papers 973, Kyoto University, Institute of Economic Research.
    5. Oscar Pavlov & Mark Weder, 2013. "Countercyclical Markups and News-Driven Business Cycles," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 16(2), pages 371-382, April.
    6. Pavlov, Oscar, 2016. "Can firm entry explain news-driven fluctuations?," Economic Modelling, Elsevier, vol. 52(PB), pages 427-434.

    More about this item

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:ijethy:v:8:y:2012:i:3:p:313-319. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=1742-7355 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.