Jang-Ting Guo

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We apply neoclassical modelling techniques to the period of the Great Depression. In particular, we examine a modification of the real business cycle model in which the possibility of indeterminacy of equilibria arises. In other words, agents’ self-fulfilling expectations can serve as a primary impulse behind fluctuations. We find that the model, driven(More)
We examine a two-sector real business cycle model with sector-specific externalities in the production of distinct consumption and investment goods. In addition, the household utility is postulated to exhibit no income effect on the demand for leisure. Unlike in the one-sector counterpart, we show that equilibrium indeterminacy can result with sufficiently(More)
Empirical evidence indicates that the elasticity of capital-labor substitution for the aggregate U.S. economy is below unity. In contrast, the existing indeterminacy literature has mostly restricted attention to a Cobb-Douglas production function which imposes a substitution elasticity exactly equal to unity. This paper examines the quantitative(More)
I examine a model with two sectors of production: consumption and investment. In the model, indeterminacy of equilibria results due to the presence of small sector-speci"c externalities in production. In fact, I "nd that indeterminacy results with a certain, minimum value of the externality in the investment sector, even with no externality in the(More)
In this paper, we analyze the importance of the frequency of decision making for macroeconomic dynamics. We explain how the frequency of decision making (period length) and the unit of time measurement (calibration frequency) di¤er and study the implications of this di¤erence for macroeconomic modelling. We construct a generic dynamic general equilibrium(More)