Home Production Meets Time-to-build

@inproceedings{GommeHomePM,
  title={Home Production Meets Time-to-build},
  author={Paul Gomme and Finn Kydland and Peter Rupert}
}
An innovation in this paper is to introduce a time-to-build technology for the production of capital into a model with home production. Our main finding is that the two anomalies that have plagued all household production models—the positive correlation between business and household investment, and household investment leading business investment over the business cycle—no longer are anomalies when time-to-build of three or four quarters is added. Bank of Cleveland. The views stated herein are… CONTINUE READING
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