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We analyze strategic relationships between buyers and sellers in markets with switching costs and dynamic uncertainty by investigating the scenario wherein a representative buyer trades with two foreign sellers located in the same foreign country. We show that, under exchange rate uncertainty,...
Persistent link: https://www.econbiz.de/10012776363
The paper studies an oligopolistic equilibrium model of financial agents who aim to share their random endowments. The risk-sharing securities and their prices are endogenously determined as the outcome of a strategic game played among all the participating agents. In the complete-market...
Persistent link: https://www.econbiz.de/10012991983
Persistent link: https://www.econbiz.de/10001418522
How does risk or uncertainty in the productivity of research affect the growth rate of the economy? To answer this question, a model of endogenous technological change is used where sustained growth stems from intentional investments in R&D from profit-maximizing firms. The uncertainty arises...
Persistent link: https://www.econbiz.de/10011326963
A growth model, in which economic growth is driven by R&D activities, is constructed to analyse issues related to the riskiness of R&D. It is shown that when R&D are risky strongly-risk-averse behaviour may suffocate the potential growth of a closed economy if risk-sharing arrangements are...
Persistent link: https://www.econbiz.de/10012847767
The analysis in this paper shows that unpredictable variations in economic productivity may have a positive or negative effect on the average growth rate of output. This theoretical ambiguity result is not solely determined by the value of the elasticity of intertemporal substitution (of...
Persistent link: https://www.econbiz.de/10011343279
How does risk or uncertainty in the productivity of research affect the growth rate of the economy? To answer this question, a model of endogenous technological change is used where sustained growth stems from intentional investments in R&D from profit-maximizing firms. The uncertainty arises...
Persistent link: https://www.econbiz.de/10014115099
a slight increase in unemployment. Our model is consistent with these facts. The main mechanism works through the higher …
Persistent link: https://www.econbiz.de/10013210826
Persistent link: https://www.econbiz.de/10009749330
lack of compensating differentials for unemployment risk can arise in equilibrium when all workers are identical and firms … differ only in job security (i.e. the probability that the worker is not sent into unemployment). In a setting where workers … risky tail of the distribution of firm-level unemployment risk. Meanwhile, unemployment becomes persistent for low-wage and …
Persistent link: https://www.econbiz.de/10010223412