Abstract
Durable goods are an important component of the business cycle. Equilibrium models of durable goods markets are made difficult by the lumpy nature of individual purchases. We show that a straightforward approximation of the distribution of durable goods holdings gives rise to a tractable equilibrium model. We analyze the case of competition as well as that of a monopoly producer.
Original language | English (US) |
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Pages (from-to) | 187-213 |
Number of pages | 27 |
Journal | Journal of Economic Theory |
Volume | 128 |
Issue number | 1 |
DOIs | |
State | Published - May 2006 |
Keywords
- Durable goods
- Equilibrium
- S,s policies
ASJC Scopus subject areas
- Economics and Econometrics