Abstract
This paper develops a three sector dynamic general equilibrium model with the specific aim of evaluating the role of consumer durables in the generation and propagation of business cycles. The model displays indeterminacy at commonly considered realistic parameter restrictions and basically constant returns to scale. If calibrated at modest increasing returns to scale, the sunspots driven model version produces a close match to moments of aggregate U.S. data.Journal of Economic LiteratureClassification Numbers: E00, E32.
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