Markups and Entry in a DSGE Model

Cavallari, Lilia (2012): Markups and Entry in a DSGE Model.

Abstract

This paper provides a DSGE model with firm entry. Simulations show that the model matches the synchronization of markups and entry observed in the data while at the same time reproducing empirically plausible moments for key macroeconomic variables. Sticky prices are essential for these results.

• Item Type: MPRA Paper
• Language: English
• Keywords: endogenous entry; firm dynamics; monopolistic competition; market power; markups
• Subjects: E - Macroeconomics and Monetary Economics > E3 - Prices, Business Fluctuations, and Cycles > E32 - Business Fluctuations ; Cycles; E - Macroeconomics and Monetary Economics > E3 - Prices, Business Fluctuations, and Cycles > E37 - Forecasting and Simulation: Models and Applications

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