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Evidence on Macroeconomic Complementarities

  • Russell Cooper
  • John Haltiwanger

This paper provides empirical evidence on macroeconomic complementarities, a restriction on the nature of interaction between individuals in a multi-agent setting. These models imply that activities across agents will be positively correlated, that discrete decisions will be synchronized and that disturbances will be magnified and propagated. The paper shows that these implications are consistent with aggregate observations as well as some microeconomic evidence. Further, looking at certain historical episodes, such as the NIRA, as well as seasonal fluctuations provides additional support for models with macroeconomic complementarities.

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File URL: http://www.nber.org/papers/w4577.pdf
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 4577.

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Date of creation: Dec 1993
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Publication status: published as Review of Economics and Statistics, vol. LXXVIII, no. 1, February 1996, pp. 78-93
Handle: RePEc:nbr:nberwo:4577
Note: EFG
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  1. Eberly, J.C., 1990. "Adjustment of Consumers'durables Stocks: Evidence from Automobile Purchases," Weiss Center Working Papers 22-91, Wharton School - Weiss Center for International Financial Research.
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  18. repec:spo:wpecon:info:hdl:2441/8681 is not listed on IDEAS
  19. Howitt, Peter, 1985. "Transaction Costs in the Theory of Unemployment," American Economic Review, American Economic Association, vol. 75(1), pages 88-100, March.
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  26. Nobuhiro Kiyotaki, 1988. "Multiple Expectational Equilibria Under Monopolistic Competition," The Quarterly Journal of Economics, Oxford University Press, vol. 103(4), pages 695-713.
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  28. Shleifer, Andrei, 1986. "Implementation Cycles," Scholarly Articles 3451303, Harvard University Department of Economics.
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  30. Milgrom, Paul & Roberts, John, 1990. "Rationalizability, Learning, and Equilibrium in Games with Strategic Complementarities," Econometrica, Econometric Society, vol. 58(6), pages 1255-77, November.
  31. John Shea, 1993. "Do Supply Curves Slope Up?," The Quarterly Journal of Economics, Oxford University Press, vol. 108(1), pages 1-32.
  32. King, Robert G. & Plosser, Charles I. & Rebelo, Sergio T., 1988. "Production, growth and business cycles : I. The basic neoclassical model," Journal of Monetary Economics, Elsevier, vol. 21(2-3), pages 195-232.
  33. 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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  35. Caballero, Ricardo J, 1993. "Durable Goods: An Explanation for Their Slow Adjustment," Journal of Political Economy, University of Chicago Press, vol. 101(2), pages 351-84, April.
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