In this paper, we develop a two-sector DSGE model with infrequent purchases of durable goods and use it to address the following three issues. Does this model help explain the recent weak recovery? Can this model help resolve the absence of co-movement between durable and non-durable consumption? Is the dynamic behavior of this model similar with that of the (durable goods) stock adjustment-cos...

We study the cyclical effects of the timing of durable goods purchases in a general equilibrium model in which both durable and non-durable goods are consumed and the durable good is lumpy. At the microeconomic level, the timing of durable goods purchases supplies some insulation for nondurable consumption over the cycle. At the macroeconomic level, the timing decisions tend to amplify and prop...

this paper represents a theoretical model from which the supply function for a durable goods is derived. it turns out that consumer at the equilibrium condition equates its user cost with the marginal value of services received by using an additional unit of durable goods. the stock price is obtained from this condition. in addition, at the equilbrium condition for producer, the stock price is ...

This paper develops the CCAPM model to allow for long-run risk in durable consumption. Allowing Epstein-Zin preferences to incorporate non-separability of durable and non-durable consumption in utility provides for an Euler equation which can be shown to provide a much better explanation of equity market features than either the basic CAPM or CCAPM. .The paper incorporates this discount factor ...

This paper studies the financing of durable assets in a model with collateral constraints due to limited enforcement. Durability affects the ease of financing: we show that more durable assets require larger down payments of internal funds per unit of capital making them harder to finance, because durability raises the price of an asset and hence the overall financing need more than its collate...

We study consumption of durable and nondurable goods when the durable good is subject to transaction costs. In the model, agents derive utility from a service flow of a durable good and a consumption flow of a nondurable good. The key feature of the model is the existence of a fixed transaction cost in the durable good market. The fixed cost induces an inaction region in the purchase of the dur...

This paper studies the aggregate dynamics of durable and nondurable consumption under slow information diffusion (SID) due to noisy observations and learning within the permanent income framework. We show that SID can significantly improve the model’s predictions on the joint behavior of income, durable consumption, and nondurable consumption at the aggregate level. Specifically, we find that S...

â â â â  reza roshan [1] â  department of economics, university of sistan and baluchestan , iran â  mosayeb pahlavani â  department of economics, university of sistan and baluchestan, iran â  mohammad nabi shahyaki tash â  department of economics, university of sistan and baluchestan, iran â  â â â  abstract â  consumption is the principal feature of iran’s gross national production. therefor...