Increasing Returns and News-Driven Business Cycles
2010/08/10
研討會日期 : 2010-08-10
時間 : 14:30
主講人 : Professor Jang-Ting Guo
地點 : B110
演講者簡介 : Jang-Ting Guo got his Ph.D. in Economics from University of California, Los Angeles in 1993. He is currently serving as Professor of Economics at University of California, Riverside. His research interest is in sunspots, self-fulfilling beliefs in real business cycle models, indeterminacy and stabilization policy, fiscal policy and macroeconomic stability, international real business cycles, dynamic optimal income taxation, monetary stability and economic growth, social status and monetary endogenous growth, macroeconomic effects of environmental quality, dynamic optimal fiscal policy, welfare and business cycles, monopolistic competition, firm size and welfare, income inequality and economic growth, exchange rate exposure of firms.
演講摘要 : It is now well known that a prototypical one-sector real business cycle model with perfect competition and constant returns-to-scale is unable to generate qualitatively realistic business cycles driven solely by news shocks that reflect agents' expectation about future total factor productivity. Specifically, key macroeconomic aggregates do not move in the same direction (the co-movement puzzle) and positive news about the economy's future bring about a current recession (the pro-cyclicality puzzle). In this paper, we show that a one-sector real business cycle model with sufficiently strong increasing returns-to-scale in production is able to resolve the co-movement, but not the pro-cyclicality, puzzle. In addition, under the standard household preference formulation that is separable between consumption and labor hours, both puzzles can be overturned when adjustment costs of capital investment are incorporated into our model economy with aggregate increasing returns.
