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Endogenous business cycles and growth

Listed author(s):
  • Klaus Walde

Current explanations why a growing economy necessarily goes through booms and recessions predict countercyclical R&D investment. As this is very controversial from an empirical perspective, a stochastic Poisson model of endogenous business cycles and growth is presented where the determinants of the cyclical behaviour of R&D investment are analytically studied. Providing an explicit expression for the expected length of a cycle shows that high frequency fluctuations can indeed be understood by this approach. It is also shown how small technological improvements translate into large aggregate fluctuations.

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File URL: http://repec.org/mmfc03/Walde.pdf
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Paper provided by Money Macro and Finance Research Group in its series Money Macro and Finance (MMF) Research Group Conference 2003 with number 109.

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Date of creation: 27 Sep 2004
Handle: RePEc:mmf:mmfc03:109
Contact details of provider: Web page: http://www.essex.ac.uk/afm/mmf/index.html

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