Lumpy Consumer Durables, Market Power, and Endogenous Business Cycles

Penn State Dept. of Econ. Working Paper No. 3-01-1

21 Pages Posted: 18 May 2001

See all articles by Kala Krishna

Kala Krishna

Pennsylvania State University - Department of Economics; National Bureau of Economic Research (NBER)

Cemile Sahin

affiliation not provided to SSRN

Multiple version iconThere are 4 versions of this paper

Date Written: July 2003

Abstract

This paper shows that lumpy consumer durables and market power can generate endogenous cycles consistent with the facts. Past sales determine the current market size of durable goods. 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.

Keywords: Endogenous businesss cycles, Lumpy consumer durables, Credit constraint

JEL Classification: E32, E13, E51, D11, D42

Suggested Citation

Krishna, Kala and Sahin, Cemile, Lumpy Consumer Durables, Market Power, and Endogenous Business Cycles (July 2003). Penn State Dept. of Econ. Working Paper No. 3-01-1, Available at SSRN: https://ssrn.com/abstract=267899 or http://dx.doi.org/10.2139/ssrn.267899

Kala Krishna (Contact Author)

Pennsylvania State University - Department of Economics ( email )

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Cemile Sahin

affiliation not provided to SSRN

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