This paper develops a two-sector dynamic general equilibrium model in which intermporal fluctuations (and sectoral comovement) are driven by idiosyncratic shocks to relative preferences between consumption goods. This class of shocks may be interpreted as shifts in consumer tastes. When shifts...

This paper explores the ability of a class of one-sector, multi-input models to generate indeterminate equilibrium paths, and endogenous cycles, without relying on factors' hoarding. The model presents a novel theoretical economic mechanism that supports sunspot-driven expansions without...

Informal firms play a crucial role in both developing and developed countries, and there is evidence of a larger presence of moonlighting firms over ghost firms. The former are firms that operate simultaneously in the official and unofficial sectors, whereas the ghost firms undertake their...