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
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aggregate fluctuations
strategic complementarities
macroeconomic volatility
government spending
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Fernández-Villaverde, Jesús
Mandelman, Federico S.
Yu, Yang
Zanetti, Francesco
- Ereignis
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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
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Objekttyp
- Arbeitspapier
Beteiligte
- Fernández-Villaverde, Jesús
- Mandelman, Federico S.
- Yu, Yang
- Zanetti, Francesco
- Federal Reserve Bank of Atlanta
Entstanden
- 2019