The Welfare Cost of Business Cycles in an Economy with Nonclearing Markets

Franck Portier () and Luis A. Puch ()

Documentos del Instituto Complutense de Análisis Económico from Universidad Complutense de Madrid, Facultad de Ciencias Económicas y Empresariales

Abstract: In 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.

New Economics Papers: this item is included in nep-dge and nep-mac
Date: 2004
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Related works:
Working Paper: The Welfare Cost of Business Cycles in an Economy with Nonclearing Markets (2004)
Working Paper: The Welfare Cost of Business Cycles in an Economy with Non-Clearing Markets (2004)
Working Paper: The Welfare Cost of Business Cycles in an Economy with Nonclearing Markets
Journal Article: The Welfare Cost of Business Cycles in an Economy with Nonclearing Markets (2007)
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Persistent link: http://EconPapers.repec.org/RePEc:ucm:doicae:0403

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