Business Cycle Models with Indeterminacy

1. Front Matter

   Pages I-X

   PDF

2. Introduction

   • Mark Weder

   Pages 1-44

3. Indeterminacy, Business Cycles and Modest Increasing Returns to Scale

   • Mark Weder

   Pages 45-87

4. Self-Fulfilling Prophecies and Business Cycles in a Two-Sector Stochastic Optimal Growth Model

   • Mark Weder

   Pages 89-124

5. Animal Spirits, Technology Shocks and the Business Cycle

   • Mark Weder

   Pages 125-161

6. Conclusion

   • Mark Weder

   Pages 163-165

7. Bibliography

   • Mark Weder

   Pages 167-179

Three original models which explain business cycles as a result of self-fulfilling expectations are presented. The models are founded on the structure of dynamic general equilibrium theory. Market power and increasing returns to scale are introduced which allow indeterminancy of the Rational Expectations equilibria to be obtained. Unlike the majority of existing literature on this subject, the departures from perfect markets and constant returns presented in these models are very low and, more importantly, at a realistic level to achieve the respective results. It is demonstrated in all of the presented models that stylized facts of the business cycle can be reproduced.

• Konjunkturzyklen
• Makroökonomik
• allgemeine Gleichgewichtstheorie
• business cycle
• business cycles
• economics
• equilibrium
• general equilibrium
• general equilibrium theory
• macroeconomics
• modeling
• welfare
• Ökonomik

• Department of Economics, Humboldt-University Berlin, Berlin, Germany

  Mark Weder

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