Coordinating business cycles

• 成果类型: Article
• 署名作者: Schaal, Edouard; Taschereau-Dumouchel, Mathieu
• 署名单位: Centre de Recerca en Economia Internacional (CREI); Cornell University
• 刊物名称: JOURNAL OF MONETARY ECONOMICS
• ISSN/ISSBN: 0304-3932
• DOI: 10.1016/j.jmoneco.2025.103829
• 发表日期: 2025
• 关键词: DYNAMIC GLOBAL GAMES; equilibrium selection; capacity utilization; uncertainty; economies; indeterminacy; multiplicity; INFORMATION; uniqueness; prices

摘要

We develop a quantitative theory of business cycles with coordination failures. Because of demand complementarities and increasing returns, firms seek to coordinate production and multiple equilibria arise. We use a global game approach to discipline equilibrium selection and show that the unique dynamic equilibrium exhibits multiple steady states. Coordination on high production may fail after a large transitory shock, pushing the economy in a quasi-permanent recession. Our calibrated model rationalizes various features of the 2007-2009 recession and its recovery. Government spending, while generally harmful, can increase welfare when the economy is transitioning between steady states. Other policy instruments are preferable to fix miscoordination.