A Note on Demand Elasticity, Prices, and the Business Cycle

1956 ◽  
Vol 38 (4) ◽  
pp. 1056
Author(s):  
Lawrence E. Fouraker
Keyword(s):  
Business Cycle ◽  
Demand Elasticity ◽  
On Demand ◽  
The Business Cycle

PRICE-SETTING WITH UNOBSERVABLE ELASTICITIES OF DEMAND: THE BUSINESS-CYCLE EFFECTS OF HETEROGENEOUS EXPECTATIONS

2015 ◽  
Vol 20 (4) ◽  
pp. 1101-1125
Author(s):  
Christian Jensen
Keyword(s):  
Business Cycle ◽  
Monopolistic Competition ◽  
Demand Elasticity ◽  
Price Setting ◽  
Heterogeneous Expectations ◽  
Relative Prices ◽  
Demand Elasticities ◽  
Market Shares ◽  
Dynamic Stochastic ◽  
The Business Cycle

In a dynamic stochastic general equilibrium model with monopolistic competition and flexible prices, we assume that producers must estimate their demand elasticities, which leads to heterogeneous expectations because of idiosyncratic shocks. I argue that these expectations shape firms' perceptions of relative prices, market shares, and individual demand elasticities, thereby distorting their price-setting and production. This model concludes that discarding the conventional assumption of known and exogenous demand elasticity generates business cycle fluctuations indistinguishable from those produced by traditional productivity shocks.

Stock Returns and the Business Cycle

CFA Digest ◽  
2005 ◽  
Vol 35 (2) ◽  
pp. 42-43
Author(s):  
Daniel B. Cashion
Keyword(s):  
Business Cycle ◽  
Stock Returns ◽  
The Business Cycle

EXPANSIONS AND RECESSIONS IN THE MEXICAN STATES: A CLASSICAL BUSINESS CYCLES APPROACH

2017 ◽  
Vol 3 (5) ◽  
pp. 32
Author(s):  
Pablo Mejía-Reyes
Keyword(s):  
Business Cycles ◽  
Business Cycle ◽  
Monthly Basis ◽  
Production Index ◽  
Clear Cut ◽  
Output Measure ◽  
Central Regions ◽  
The Business Cycle ◽  
National Business ◽  
Cycle Indicator

This paper aims to document expansions and recessions characteristics for 17 states of Mexico over the period 1993-2006 by using a classical business cycle approach. We use the manufacturing production index for each state as the business cycle indicator since it is the only output measure available on a monthly basis. According to this approach, we analyse asymmetries in mean, volatility and duration as well as synchronisation over the business cycle regimes (expansions and recessions) for each case. Our results indicate that recessions are less persistent and more volatile (in general) than expansions in most Mexican states; yet, there is no clear cut evidence on mean asymmetries. In turn, there seems to be strong links between the business cycle regimes within the Northern and Central regions of the country and between states with similar industrialisation patterns, although it is difficult to claim that a national business cycle exists.

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