Endogenous capacity utilization and macroeconomic persistence

• 成果类型: Article
• 署名作者: Alvarez-Lois, Pedro P.
• 署名单位: Bank of England
• 刊物名称: JOURNAL OF MONETARY ECONOMICS
• ISSN/ISSBN: 0304-3932
• DOI: 10.1016/j.jmoneco.2006.07.001
• 发表日期: 2006
• 页码: 1943-1967
• 关键词: persistence; idiosyncratic demand uncertainty; capacity utilization; endogenous mark-up

摘要

This paper presents a monetary dynamic general equilibrium model featuring a strong internal propagation mechanism. Limited short-run factor substitutability and idiosyncratic demand uncertainty play a prominent role in the results. Firms are ex post heterogeneous and a well defined distribution of capacity utilization rates characterizes the equilibrium of the model. The economy responds gradually to aggregate shocks since firms with excess capacity can raise production without experiencing large increases in their marginal costs. The modeling framework presented in this paper offers a plausible microeconomic interpretation for reduced form mark-up shocks typically considered in the new Keynesian literature. (c) 2006 Elsevier B.V. All rights reserved.