Lumpy Consumer Durables, Market Power, and Endogenous Business Cycles

Kala Krishna () and Cemile Yavas

No 8296, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper examines the role of lumpy consumer durables and market power in generating endogenous cycles which seem to be consistent with the facts. When goods are durable, past consumption choices determine the current market size which consists of consumers who have not purchased the good previously, and who have the income to make their potential demand effective. Larger past sales, ceteris paribus, thus naturally result in a smaller current market size and income. In this manner, the seeds of a downturn are sown in an upturn.

JEL-codes: E13 E32 (search for similar items in EconPapers)
Date: 2001-05
Note: EFG
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Published as Krishna, Kala and Cemile Yavas. "Lumpy Consumer Durables, Market Power, And Endogenous Business Cycles," Canadian Journal of Economics, 2004, v37(2,May), 375-391.

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Journal Article: Lumpy consumer durables, market power, and endogenous business cycles (2004)
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