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Endogenous product scope: market interlacing and aggregate business cycle dynamics

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Pavlov, O ORCID: 0000-0002-3961-1242 and Weder, M 2022 , 'Endogenous product scope: market interlacing and aggregate business cycle dynamics' , European Economic Review, vol. 148 , doi: 10.1016/j.euroecorev.2022.104243.

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Abstract

This paper examines a market interlacing industry configuration in general equilibrium with multi-product firms. In contrast to previous studies which utilize market segmentation, firms produce multiple products even in the complete absence of the love of variety. Product scopes are procyclical and entry and exit of firms generates an endogenous amplification mechanism. When simulated by shocks derived from the efficiency and labor wedges, the model replicates the changes in dynamics between the pre- and post 1983 periods, and explains the hours-productivity puzzle.

Item Type: Article
Authors/Creators:Pavlov, O and Weder, M
Keywords: multi-product firms, business cycles
Journal or Publication Title: European Economic Review
Publisher: Elsevier BV
ISSN: 0014-2921
DOI / ID Number: 10.1016/j.euroecorev.2022.104243
Copyright Information:

Copyright 2022 The Author(s)Licensed under Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International (CC BY-NC-ND 4.0)https://creativecommons.org/licenses/by-nc-nd/4.0/

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