The Welfare Cost of Business Cycles in an Economy with Nonclearing Markets

Luis Puch and Franck Portier ()

No 570, 2004 Meeting Papers from Society for Economic Dynamics

Abstract: In this paper we measure the welfare cost of fluctuations in a simple representative agent economy with nonclearing markets. The market friction we consider involves price rigidities and a voluntary exchange rationing scheme. These features are incorporated into an otherwise standard neoclassical growth model. We show that the frictions we introduce make the losses from fluctuations much bigger than in a frictionless environment.

Keywords: Cost; of; Business; Cycles; --; Nonclearing; Markets; --; Dynamic; General; Equilibrium (search for similar items in EconPapers)
JEL-codes: C63 C68 E32 (search for similar items in EconPapers)
Date: 2004
New Economics Papers: this item is included in nep-dge and nep-mac
References: Add references at CitEc
Citations: View citations in EconPapers (3)

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Related works:
Journal Article: The Welfare Cost of Business Cycles in an Economy with Nonclearing Markets (2007)
Working Paper: The Welfare Cost of Business Cycles in an Economy with Non-Clearing Markets (2004)
Working Paper: The Welfare Cost of Business Cycles in an Economy with Nonclearing Markets (2004)
Working Paper: The Welfare Cost of Business Cycles in an Economy with Nonclearing Markets
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