This paper constructs a simple endogenous growth model featuring the product cycle, i.e., the transition from monopoly to perfect competition, and studies its implications for both asset market and business cycle statistics. I find that the product cycle is a powerful amplification mechanism;...

The authors study the impact that the liquidity crunch in 2008-2009 had on the U.S. economy's growth trend. To this end, the authors propose a model featuring endogenous productivity a la Romer and a liquidity friction a la Kiyotaki-Moore. A key finding in the authors' study is that liquidity...

This paper proposes a structural explanation for a news shock. My hypothesis is that a surprise, research and development sector-specific productivity shock may be identified and labeled as news by prominent empirical research in the literature. To examine this hypothesis, I construct a simple...

This paper studies a model that includes investment-specific technological shocks, a variable capacity utilization rate, and endogenous product entry subject to sunk product development costs. These factors constitute a powerful amplification mechanism as they interact with each other. The model...

Most of the theoretical work in the news shock literature abstracts away from structural explanations, assuming instead that news is a pure signal giving agents advance notice that aggregate technology will undergo exogenous change at some future point. This paper proposes that a surprise...

This paper shows that the empirically documented disinflationary nature of news shocks is consistent with the implications of a sensibly modified version of a New Keynesian model, even if capital is introduced to the model. The modification proposed in the current paper, however, is different...