Arbeitspapier

Search complementarities, aggregate fluctuations, and fiscal policy

We develop a quantitative business cycle model with search complementarities in the inter-firm matching process that entails a multiplicity of equilibria. An active equilibrium with strong joint venture formation, large output, and low unemployment coexists with a passive equilibrium with low joint venture formation, low output, and high unemployment. Changes in fundamentals move the system between the two equilibria, generating large and persistent business cycle fluctuations. The volatility of shocks is important for the selection and duration of each equilibrium. Sufficiently adverse shocks in periods of low macroeconomic volatility trigger severe and protracted downturns. The magnitude of government intervention is critical to foster economic recovery in the passive equilibrium, while it plays a limited role in the active equilibrium.

Sprache
Englisch

Erschienen in
Series: Working Paper ; No. 2019-9

Klassifikation
Wirtschaft
Computational Techniques; Simulation Modeling
Computable General Equilibrium Models
Business Fluctuations; Cycles
Prices, Business Fluctuations, and Cycles: Forecasting and Simulation: Models and Applications
Financial Markets and the Macroeconomy
Asset Pricing; Trading Volume; Bond Interest Rates
Thema
aggregate fluctuations
strategic complementarities
macroeconomic volatility
government spending

Ereignis
Geistige Schöpfung
(wer)
Fernández-Villaverde, Jesús
Mandelman, Federico S.
Yu, Yang
Zanetti, Francesco
Ereignis
Veröffentlichung
(wer)
Federal Reserve Bank of Atlanta
(wo)
Atlanta, GA
(wann)
2019

DOI
doi:10.29338/wp2019-09
Handle
Letzte Aktualisierung
10.03.2025, 11:43 MEZ

Datenpartner

Dieses Objekt wird bereitgestellt von:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.

Objekttyp

  • Arbeitspapier

Beteiligte

  • Fernández-Villaverde, Jesús
  • Mandelman, Federico S.
  • Yu, Yang
  • Zanetti, Francesco
  • Federal Reserve Bank of Atlanta

Entstanden

  • 2019

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