Sectoral shocks, learning, and aggregate fluctuations

Andrew Caplin, John Leahy

    Research output: Contribution to journalArticle

    Abstract

    We present a model in which sectoral shocks have aggregate consequences. The model relies on irreversible investment and imperfect information to slow the adjustment of expanding industries. We show that this gradual expansion is sub-optimal.

    Original languageEnglish (US)
    Pages (from-to)777-794
    Number of pages18
    JournalReview of Economic Studies
    Volume60
    Issue number4
    DOIs
    StatePublished - Oct 1993

    ASJC Scopus subject areas

    • Economics and Econometrics

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