Lumpy Consumer Durables, Market Power, and Endogenous Business Cycles

Posted: 12 Dec 2003

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

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.

JEL Classification: E32, E13

Suggested Citation

Krishna, Kala and Sahin, Cemile, Lumpy Consumer Durables, Market Power, and Endogenous Business Cycles. Available at SSRN: https://ssrn.com/abstract=458500

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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