Dynamic (S, s) Economies

Ricardo Caballero (caball@mit.edu) and Eduardo Engel

Econometrica, 1991, vol. 59, issue 6, 1659-86

Abstract: In this paper, the authors provide a framework to study the aggregate dynamic behavior of an economy where individual units follow (S, s) policies and are subject to aggregate and idiosyncratic shocks. They characterize structural and stochastic heterogeneities that ensure convergence of the economy's aggregate to that of its (stochastic) frictionless counterpart, determine the speed at which convergence takes place, and describe the transitional dynamics of this economy. They study the evolution of the economy's aggregate and the evolution of the difference between this aggregate and that of the difference between this aggregate and that of an economy without microeconomic friction, where the latter pertains to a situation where individual units adjust with no delay to all shocks. Copyright 1991 by The Econometric Society.

Date: 1991
References: Add references at CitEc
Citations: View citations in EconPapers (113)

Downloads: (external link)
http://links.jstor.org/sici?sici=0012-9682%2819911 ... O%3B2-L&origin=repec full text (application/pdf)
Access to full text is restricted to JSTOR subscribers. See http://www.jstor.org for details.

Related works:
Working Paper: Dynamic (S,s) Economies (1991)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ecm:emetrp:v:59:y:1991:i:6:p:1659-86

Ordering information: This journal article can be ordered from
https://www.economet ... ordering-back-issues
econometrica@econometricsociety.org

Access Statistics for this article

Econometrica is currently edited by Guido Imbens

More articles in Econometrica from Econometric Society Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery (contentdelivery@wiley.com).