| Article ID | Journal | Published Year | Pages | File Type |
|---|---|---|---|---|
| 5099156 | Journal of Economic Dynamics and Control | 2012 | 13 Pages |
Abstract
Countercyclical markups are a key transmission mechanism in many endogenous business cycle models. Yet, recent findings suggest that aggregate markups in the US are procyclical. The current model addresses this issue. It extends GalÃ's (1994) composition of aggregate demand model by endogenous entry and exit of firms and by product variety effects. Endogenous business cycles emerge with procyclical markups that are within empirically plausible ranges.
Related Topics
Physical Sciences and Engineering
Mathematics
Control and Optimization
Authors
Oscar Pavlov, Mark Weder,