Demand, markups and the business cycle

B-Tier
Journal: European Economic Review
Year: 2020
Volume: 127
Issue: C

Score contribution per author:

1.005 = (α=2.01 / 2 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

We generalize the demand side of a Real Business Cycle model introducing non-homothetic intratemporal preference aggregators over differentiated final goods. Under monopolistic competition this generates markups which vary with aggregate consumption. We estimate a flexible preference specification through Bayesian methods and obtain results consistent with substitutability across goods that is increasing in consumption. The associated markup variability magnifies the propagation of shocks through additional substitution effects on labor supply and consumption.

Technical Details

RePEc Handle
repec:eee:eecrev:v:127:y:2020:i:c:s0014292120301033
Journal Field
General
Author Count
2
Added to Database
2026-01-25