2021-01_Pavlov_Weder.pdf (308.91 kB)
Endogenous product scope: Market interlacing and aggregate business cycle dynamics
reportposted on 2023-05-28, 00:05 authored by Oscar PavlovOscar Pavlov, Weder, M
This paper examines a market interlacing industry configuration in general equilibrium with multi-product firms. In contrast to previous studies which utilize market segmentation, firms produce multiple products even in the complete absence of the love of variety. Product scopes are procyclical and entry and exit of firms generates an endogenous amplification mechanism. When simulated by shocks derived from the efficiency and labor wedges, the model replicates the changes in dynamics between the pre- and post 1983 periods, and explains the hours-productivity puzzle.
Department/SchoolSchool of Engineering
PublisherUniversity of Tasmania
Place of publicationHobart
Rights statementCopyright 2020 University of Tasmania Discussion Paper Series N 2021-01 JEL Classification: E32