Score contribution per author:
α: calibrated so average coauthorship-adjusted count equals average raw count
This paper studies, within a general equilibrium model, the dynamics of Y2K-type shocks: anticipated, permanent losses in output whose magnitude can be lessened by investing resources in advance. The implied dynamics replicate three observed characteristics of those triggered by the Y2K bug: (1) Precautionary investment: investment in solving the Y2K problem begins before the year 2000; (2) Investment delay: although economic agents have been aware of the Y2K problem since the 1960s, investment did not begin until recently; (3) Investment acceleration: as the new millennium approaches, the amount of resources allocated to solving the Y2K problem increases. In addition, the model predicts that Y2K investment peaks at the end of 1999. (Copyright: Elsevier)