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A. Matsumoto and F. Szidarovszky, “Continuous Hicksian Trade Cycle Model with Consumption and Investment Time Delays,” Journal of Economic Behavior and Organization, Vol. 75, No. 1, 2010, pp. 95-114.
doi:10.1016/j.jebo.2010.03.010
has been cited by the following article:
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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.