Product Scope and Endogenous Fluctuations

Mark Weder and Oscar Pavlov

VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy from Verein für Socialpolitik / German Economic Association

Abstract: Recent empirical evidence suggests that product creation is procyclical and it occurs largely within existing fi rms. Motivated by these findings, the current paper investigates the role of intrafi rm product scope choice in a general equilibrium economy with oligopolistic producers. We show that the multi-product nature of fi rms makes the economy signifi cantly more susceptible to sunspot equilibria. The estimated indeterminate model generates artifi cial business cycles that closely resemble empirically observed fl uctuations.

JEL-codes: E30 E32 E37 (search for similar items in EconPapers)
Date: 2015
New Economics Papers: this item is included in nep-dge and nep-mac
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Citations: View citations in EconPapers (4)

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Related works:
Journal Article: Product Scope and Endogenous Fluctuations (2017)
Working Paper: Product Scope and Endogenous Fluctuations (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:vfsc15:112942

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