Beaudry, P;
Collard, F;
Portier, F;
(2011)
Gold rush fever in business cycles.
Journal of Monetary Economics
, 58
(2)
pp. 84-97.
10.1016/j.jmoneco.2011.01.001.
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Abstract
A flexible price model of the business cycle is proposed, in which fluctuations are driven primarily by inefficient movements in investment around a stochastic trend. A boom in the model arises when investors rush to exploit new market opportunities even though the resulting investments simply crowd out the value of previous investments. A metaphor for such profit driven fluctuations are gold rushes, as they are periods of economic boom associated with expenditures aimed at securing claims near new found veins of gold. An attractive feature of the model is its capacity to provide a simple structural interpretation to the properties of a standard consumption and output Vector Autoregression.
| Type: | Article |
|---|---|
| Title: | Gold rush fever in business cycles |
| Open access status: | An open access version is available from UCL Discovery |
| DOI: | 10.1016/j.jmoneco.2011.01.001 |
| Publisher version: | https://doi.org/10.1016/j.jmoneco.2011.01.001 |
| Language: | English |
| Additional information: | This version is the author accepted manuscript. For information on re-use, please refer to the publisher’s terms and conditions. |
| Keywords: | Business Cycle, Investment, Imperfect Competition |
| UCL classification: | UCL UCL > Provost and Vice Provost Offices > UCL SLASH UCL > Provost and Vice Provost Offices > UCL SLASH > Faculty of S&HS UCL > Provost and Vice Provost Offices > UCL SLASH > Faculty of S&HS > Dept of Economics |
| URI: | https://discovery.ucl.ac.uk/id/eprint/10040001 |
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