Real Business Cycles with Cournot Competition and Endogenous Entry

Andrea Colciago and Federico Etro ()

No 135, Working Papers from University of Milano-Bicocca, Department of Economics

Abstract: We introduce Cournot competition and endogenous entry in an oth- erwise neoclassical macroeconomic framework. First, we develop a model with exogenous savings à la Solow describing the dynamic path of busi- ness creation. Then, we develop a model à la Ramsey describing the dynamic interaction of consumption and business creation. Our models are able to explain why markups vary countercylically and pro?ts are procyclical. The analysis of permanent and temporary technology and preference shocks and of the second moments suggests that our model can outperform the Real Business Cycle framework in many dimensions.

Pages: 30 pages
Date: 2007-09, Revised 2008-02
New Economics Papers: this item is included in nep-bec, nep-com, nep-dge, nep-mac and nep-mic
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Citations: View citations in EconPapers (1)

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http://repec.dems.unimib.it/repec/pdf/mibwpaper135.pdf First version, 2008 (application/pdf)

Related works:
Journal Article: Real business cycles with Cournot competition and endogenous entry (2010)
Working Paper: Real Business Cycles with Cournot Competition and Endogenous Entry (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:mib:wpaper:135

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