Cross-sectional heterogeneity and the persistence of aggregate fluctuations

Article Abstract:

The expected growth rate of a firm and its size is related to the high degree of persistence of shocks to aggregate out put. Almost any kind of a shock influences firms' incentive to invest in growth thereby leading to a reallocation of firms across size categories. If small firms grow faster than big ones, the impact effect of the shock on aggregate output is gradually absorbed. But when small firms become big ones and start to grow at the lower rate of big firms, the shock absorption rate decreases over the adjustment path. These shocks require changes in neither in number of firms in the market nor the rate of technological process and are a result of cross-sectional heterogeneity.

United States, Science & research, Venture Analysis, Business enterprises, Growth, Company growth

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The effects of moral hazard on asset prices when financial markets are complete

Article Abstract:

A model was formulated to analyze asset prices contained in Kahn's economic environment with moral hazard. The model showed correlation with Kahn's model with regards to forecasting that equilibrium allocations are Pareto optimal. The formulated model, however, yielded lower prices for macro-assets with positive payoffs. It also achieved an aggregation finding when all agents have log utility.

Analysis, Financial markets, Assets (Accounting)

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Fractional beta convergence

Article Abstract:

The growth model developed by Solow-Swan is extended and cross-sectional heterogeneity is incorporated.

Economic aspects, Economic development

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