We propose a model of a firm’s reversible investment decision with macroeconomic conditions based on optimal switching of a diffusion regime. The switching costs and the cash flow generated from the firm depend on a business cycle alternating via a Markov chain, and the triggers of investment and disinvestment in each state are determined endogenously. Provided the investment costs are cyclical...

This article argues that competitive electricity markets are prone to the same cycles of boom and bust that appear in commodity markets and in a specialized industry like real estate. The article then demonstrates how boom and bust might appear in the western electricity system using computer simulation. A “business as usual” simulation shows that the west might be at the crest of a building bo...

this paper identifies characteristics of business cycles in iran, applying hodrick-prescott (hp) and band-pass (bp) filters. using seasonal and anual data for 1970-2003, it is found that oil income is the key driving factor of business cycles in the iranian economy. furthermore, it is indicated that iran's economy has experienced seven business cycles during this period, in which the econo...

empirical evidence seems to indicate that economic growth has varied inversely with natural resource abundance across countries, in which high natural resources dependent economies experience the low economic growth. this paper first reviews the literature of resources curse and shows that the most important challenges of economic development of iran are those mechanisms that change the blessin...

The practical use of high-fidelity multidisciplinary optimization techniques in low-boom supersonic business-jet designs has been limited because of the high computational cost associated with computational fluid dynamics-based evaluations of both the performance and the loudness of the ground boom of the aircraft. This is particularly true of designs that involve the sonic boom loudness as eit...

This article argues that competitive electricity markets are prone to the same cycles of boom and bust that appear in commodity markets and in a specialized industry like real estate. The article then demonstrates how boom and bust might appear in the western electricity system using computer simulation. A “business as usual” simulation shows that the west might be at the crest of a building bo...

In the last decade of the 20th century, the U.S. economy witnessed a persistent and substantial increase in private investment. The boom was sharply reversed in 2001, and a great deal of evidence suggests that the capital stock had become excessive. Standard equilibrium business cycle models have difficulties in predicting the investment boom and overshooting. An embodied technology model is co...

Internet firms succeed is the “business model.” Much of the success of such e-commerce pioneers as Dell, Amazon, and eBay has been attributed to their novel Internet business models. And one of the first questions in assessing any new e-commerce venture during the Internet boom was likely to be, “What’s the business model?” Conversely, when high-profile businesses like Boo.com have failed, this...

innovation is the key to growth, without it, most organization would forever be stuck doing the same old things the same old way. new products, new services and new ways of doing business would never emerge. entrepreneurship activities brings about business innovation with resultant development in enterprises which also serves as a panacea to economic growth in developing countries. entrepreneu...

In this paper standard macroeconomic models are combined with the Hayek-Garrison model of the business cycle in order to demonstrate in which way modern central banks are prone to initiate boom-bust-cycles through monetary policy. It is shown under which conditions such a policy will occur and why central bank authorities tend to be misled by an apparently stable price-level. Without central ba...