Non-convexities in quantitative general equilibrium studies of business cycles
By: Edward C. Prescott.
Series: Federal Reserve Bank of Minneapolis, Research Department staff report ;; 312; Staff report (Federal Reserve Bank of Minneapolis. Research Dept. : Online) ;; 312.
Publisher: Federal Reserve Bank of Minneapolis
Published: 2003
Place of publication: [Minneapolis, Minn.]
Language: eng
Format: Electronic resource
Subjects: Business cycles -- Econometric models.
Description: "This paper reviews the role of micro non-convexities in the study of business cycles.  One important non-convexity arises because an individual can work only one workweek length in a given week.  The implication of this non-convexity is that the aggregate intertemporal elasticity of labor supply is large and the principal margin of adjustment is in the number employed--not in the hours per person employed--as observed.  The paper also reviews a business cycle model with an occasionally binding capacity constraint.  This model better mimics business cycle fluctuations than the standard real business cycle model.  Aggregation in the presence of micro non-convexities is key in the model"--Federal Reserve Bank of Minneapolis web site.
Notes: Also available in print.
Includes bibliographical references.
Title from PDF file as viewed on 11/17/2004.
System requirements: Adobe Acrobat Reader.
Mode of access: World Wide Web.