On business cycles of product variety and quality

Masashige Hamano

No 6766, EcoMod2014 from EcoMod

Abstract: This paper explores the role played by product variety and quality in a real business cycle model.Firms are heterogeneous in terms of their specific quality as well as productivity level. Firms which have costly technology enter in the period of high aggregated demand and produce high quality goods. The average quality level and the number of available varieties are procyclical as in the data. The model can replicate the observed inflationary bias in the conventional CPI due to a rise in the number of new product varieties and quality.

Keywords: US; Business cycles; General equilibrium modeling (CGE) (search for similar items in EconPapers)
Date: 2014-07-03
New Economics Papers: this item is included in nep-bec, nep-dge and nep-mac
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Citations: View citations in EconPapers (1)

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Related works:
Working Paper: On Quality and Variety Bias in Aggregate Prices (2017)
Working Paper: On business cycles of variety and quality (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:ekd:006356:6766

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