Equilibrium in a durable goods market with lumpy adjustment

Andrew Caplin, John Leahy

    Research output: Contribution to journalArticlepeer-review


    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 languageEnglish (US)
    Pages (from-to)187-213
    Number of pages27
    JournalJournal of Economic Theory
    Issue number1
    StatePublished - May 2006


    • Durable goods
    • Equilibrium
    • S,s policies

    ASJC Scopus subject areas

    • Economics and Econometrics


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