Lumpy Consumer Durables, Market Power, and Endogenous Business Cycles

53 Pages Posted: 10 May 2001 Last revised: 4 Mar 2021

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: May 2001

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.

Suggested Citation

Krishna, Kala and Sahin, Cemile, Lumpy Consumer Durables, Market Power, and Endogenous Business Cycles (May 2001). NBER Working Paper No. w8296, Available at SSRN: https://ssrn.com/abstract=269546

Kala Krishna (Contact Author)

Pennsylvania State University - Department of Economics ( email )

523 Kern Graduate Building
University Park, PA 16802-3306
United States
814-865-1106 (Phone)
814-863-4775 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Cemile Sahin

affiliation not provided to SSRN

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
23
Abstract Views
1,026
PlumX Metrics