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Solving the Procyclical News Shock Problem

M. Saif Mehkari () and Bill Dupor ()

No 400, 2010 Meeting Papers from Society for Economic Dynamics

Abstract: vintage capital magnifi es the boom signi cantly. By vintage capital, we mean that the pre-existing capital stock's efficiency grows by relatively less than does future capitalinvestment in response to the shock.

Date: 2010
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More papers in 2010 Meeting Papers from Society for Economic Dynamics Society for Economic Dynamics Marina Azzimonti Department of Economics Stonybrook University 10 Nicolls Road Stonybrook NY 11790 USA. Contact information at EDIRC.
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