Lumpy Consumer Durables, Market Power, and Endogenous Business Cycles / Kala Krishna, Cemile Yavas.

Format:

Book

Author/Creator:

Krishna, Kala.

Contributor:

National Bureau of Economic Research.

Yavas, Cemile.

Series:

Working Paper Series (National Bureau of Economic Research) no. w8296.

NBER working paper series no. w8296

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2001.

Summary:

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.

Notes:

Print version record

May 2001.