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 language | English (US) |
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Pages (from-to) | 777-794 |
Number of pages | 18 |
Journal | Review of Economic Studies |
Volume | 60 |
Issue number | 4 |
DOIs | |
State | Published - Oct 1993 |
ASJC Scopus subject areas
- Economics and Econometrics