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has been cited by the following article:

• TITLE: Durability and Economic Dynamics

  AUTHORS: Atsuo Utaka

  KEYWORDS: Oscillatory Equilibria, Durability

  JOURNAL NAME: Theoretical Economics Letters, Vol.1 No.3, November 7, 2011

  ABSTRACT: This paper investigates how product’s durability affects the dynamic properties of the economy, using a simple overlapping generations model with durable goods. One of the chief characteristics of the durable-goods market is that a sale condition at a certain period affects another period’s condition. It is shown that this interaction causes oscillatory equilibria that diverge from the stationary point. Hicks [1] argued that unstable oscillations in the economy lead to endogenous business cycles. This paper’s result provides one reason of how unstable oscillations occur from firm’s optimizing behavior.