Product Scope and Endogenous Fluctuations

Oscar Pavlov and Mark Weder

Review of Economic Dynamics, 2017, vol. 24, 175-191

Abstract: Recent empirical evidence suggests that product creation is procyclical and it occurs largely within existing firms. Motivated by these findings, the current paper investigates the role of intra-firm product scope choice in a general equilibrium economy with oligopolistic producers. It shows that the multi-product nature of firms makes the economy susceptible to sunspot equilibria. The model is estimated via Bayesian methods. Artificial business cycles closely resemble empirically observed fluctuations with sunspots explaining a significant portion of U.S. business cycles. (Copyright: Elsevier)

Keywords: Indeterminacy; sunspot equilibria; multi-product firms; business cycles; Bayesian estimation (search for similar items in EconPapers)
JEL-codes: E32 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

Downloads: (external link)
https://dx.doi.org/10.1016/j.red.2017.01.006
Access to full texts is restricted to ScienceDirect subscribers and institutional members. See https://www.sciencedirect.com/ for details.

Related works:
Software Item: Code and data files for "Product Scope and Endogenous Fluctuations" (2017)
Working Paper: Online Appendix to "Product Scope and Endogenous Fluctuations" (2017)
Working Paper: Product Scope and Endogenous Fluctuations (2015)
Working Paper: Product Scope and Endogenous Fluctuations (2015)
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:red:issued:15-129

Ordering information: This journal article can be ordered from
https://www.economic ... ription-information/

DOI: 10.1016/j.red.2017.01.006

Access Statistics for this article

Review of Economic Dynamics is currently edited by Loukas Karabarbounis

More articles in Review of Economic Dynamics from Elsevier for the Society for Economic Dynamics Contact information at EDIRC.
Bibliographic data for series maintained by Christian Zimmermann ().