Technology, growth and the business cycle

Incomplete Markets , Growth , and the Business Cycle

We introduce a Ramsey growth model with incomplete markets, decentralized production , and idiosyncratic technological risk. The combination of uninsurable shocks with the precautionary motive can slow down capital accumulation or give rise to persistent fluctuations even when agents are very patient and technology is strictly convex. The model generates closed-form expressions for the equilibr...

Technology Diffusion and Business Cycle Asymmetry

The goal of this paper is to theoretically account for business cycle asymmetries of deepness and steepness. The former means that recessions are deeper than expansions are tall, and the latter that recessions are steeper than expansions. In this paper I introduce the process of technology diffusion and learning like general purpose technology in the framework of real business cycles. I assume ...

Business Cycle Features In The Iranian Economy

Animal spirits, technology shocks and the business cycle

This paper presents a two-sector growth model which allows indeterminacy to occur at relatively mild degrees of increasing returns. It is shown that economies of scale need only be present in one sector of the economy, e.g. the investment good producing sector. This new feature of the model builds on evidence that was recently reported by Basu and Fernald (1997), (Journal of Political Economy 1...

Beyond the Business Cycle: The Need for a Technology-Based Growth Strategy

This paper assesses the limitations of monetary and fiscal policies for establishing long-term growth trajectories and instead proposes a technology-based economic strategy targeted at long-term growth in productivity. The model expands the original Schumpeterian concept of technology as the long-term driver of economic growth where technology is characterized as a homogeneous entity developed ...