Who matters in dynamic coordination problems?
Bernardo Guimaraes and
No 543, Textos para discussão from FGV EESP - Escola de Economia de São Paulo, Fundação Getulio Vargas (Brazil)
This paper studies a dynamic coordination model with timing frictions and heterogeneity in several dimensions. Each agent might a ect and be a ected by others in di erent ways, and the frequency of their decisions might di er. There is a unique equilibrium in the model. At times, the economy might be stuck in an ine cient low-output equilibrium, and subsidies can improve welfare. The optimal subsidy does not depend on each type's timing frictions: at each point in time, the planner should simply compensate each agent for its externality on others at that particular moment.
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Journal Article: Who matters in dynamic coordination problems? (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:fgv:eesptd:543
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