Portier, Franck and Puch González, Luis Antonio (2004) The welfare cost of business cycles in an economy with nonclearing markets. [Working Paper or Technical Report]
Official URL: http://eprints.ucm.es/7717/
In this paper we measure the welfare cost of fluctuations in a simple representative agent economy with nonclearing markets. The market friction we consider involves price rigidities and a voluntary exchange rationing scheme. These features are incorporated into an otherwise standard neoclassical growth model. We show that the frictions we introduce make the losses from fluctuations much bigger than in a frictionless environment.
|Item Type:||Working Paper or Technical Report|
|Additional Information:||JEL classification: E32, C63, C68|
|Uncontrolled Keywords:||Cost of business cycles, Nonclearing markets, Dynamic general equilibrium|
|Subjects:||Social sciences > Economics > Econometrics|
|Series Name:||Documentos de trabajo del Instituto Complutense de Análisis Económico (ICAE)|
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|Deposited On:||11 Mar 2008|
|Last Modified:||15 Nov 2013 11:49|
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