Human capital formation and business cycle persistence
Article Abstract:
The movement of labor in and out of the human capital formation sector was shown to sustain a substantial propagation mechanism that explains the persistence of shocks in a business cycle. The persistence is explained by the low elasticity of substitution between the skilled and unskilled labor sectors compared to the high elasticity in the production of the physical good. The study showed the strong potential of elasticity measures as an indicator of business cycle propagation and economic growth.
Publication Name: Journal of Monetary Economics
Subject: Economics
ISSN: 0304-3932
Year: 1998
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Indeterminacy, home production, and the business cycle: a calibrated analysis
Article Abstract:
Formulation of a business cycle model with a market and a home sector revealed the existence of a multiple equilibria. Multiple equilibria results as the model's externalities are set based on empirical evidence. The existence of equilibria also indirectly suggests the possibility that cycles can be affected by self-fulfilling expectations. Time series produced by the approach possess characteristics that are similar to real American postwar series.
Publication Name: Journal of Monetary Economics
Subject: Economics
ISSN: 0304-3932
Year: 1998
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Nonlinear response of firm investment to Q: testing a model of convex and non-convex adjustment costs
Article Abstract:
An S-shaped relationship exists between firm investment and q. Such relationship indicates that investment's sensitivity to q increases with q for low values of q then decreases for intermediate values of q until it flattens out. The existence of S-shaped relationship between investment and q can be helpful in the development and assessment of company investment's structural models.
Publication Name: Journal of Monetary Economics
Subject: Economics
ISSN: 0304-3932
Year: 1998
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