Colciago, Andrea and Etro, Federico (2007): Real Business Cycles with Cournot Competition and Endogenous Entry.
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We introduce Cournot competition and endogenous entry in an otherwise neoclassical macroeconomic framework. First, we develop a model with exogenous savings à la Solow describing the dynamic path of business creation. Then, we develop a model à la Ramsey describing the dynamic interaction of consumption and business creation. Our models are able to explain why markups vary countercylically and profits are procyclical. The analysis of permanent and temporary technology and preference shocks and of the second moments suggests that our model can outperform the Real Business Cycle framework in many dimensions.
|Item Type:||MPRA Paper|
|Original Title:||Real Business Cycles with Cournot Competition and Endogenous Entry|
|Keywords:||Business Cycle; Cournot Competition; Endogenous Entry|
|Subjects:||E - Macroeconomics and Monetary Economics > E3 - Prices, Business Fluctuations, and Cycles > E32 - Business Fluctuations; Cycles
L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L13 - Oligopoly and Other Imperfect Markets
|Depositing User:||Andrea Colciago|
|Date Deposited:||25. Feb 2008 16:18|
|Last Modified:||14. Feb 2013 08:12|
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