Entry Dynamics, Demand Shocks and Induced Productivity Fluctuations

This paper analyses a small open economy Ramsey model with an endogenous labor supply and no capital. The number of firms is subject to adjustment costs, so that the entry dynamics is determined endogenously. We find that with imperfect competition, there is a first order effect of a demand shock which is absent in the Walrasian equivalent. We solve and analyse the dynamic model for permanent and temporary demand shocks.

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Year of publication:	2003
Authors:	Aloi, Marta ; Dixon, Huw
Published in:	Ekonomia. - Cyprus Economic Society - CES. - Vol. 6.2003, 2, p. 115-146
Publisher:	Cyprus Economic Society - CES

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Type of publication:	Article
Classification:	E2 - Consumption, Saving, Production, Employment, and Investment ; E6 - Macroeconomic Policy Formation, Macroeconomic Aspects of Public Finance, Macroeconomic Policy, and General Outlook ; L1 - Market Structure, Firm Strategy, and Market Performance
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005524058