This paper introduces a macromodel with oligopoly and entry/exit in a framework where individuals are heterogeneous in their budget constraints, since they can be workers, new entrant entrepreneurs, incumbent entrepreneurs or unemployed and may change their status due to a stochastic process, associated to entry and exit. Agents’ heterogeneity is explicitly modelled in the aggregate demand, that also accounts for the income distribution. Heterogeneity also plays a relevant role in the process of entry/exit in the goods market, which interacts with the labour market and generates macroeconomic fluctuations. As shown in the agent-based numerical simulation, the model provides a new interpretation of the business cycle and an explanation for the empirical phenomenon of countercyclical mark up.

Business Cycle in a Macromodel with Oligopoly and Agents’ Heterogeneity: An Agent-Based Approach

MORINI, MATTEO;TERNA, Pietro
2017

Abstract

This paper introduces a macromodel with oligopoly and entry/exit in a framework where individuals are heterogeneous in their budget constraints, since they can be workers, new entrant entrepreneurs, incumbent entrepreneurs or unemployed and may change their status due to a stochastic process, associated to entry and exit. Agents’ heterogeneity is explicitly modelled in the aggregate demand, that also accounts for the income distribution. Heterogeneity also plays a relevant role in the process of entry/exit in the goods market, which interacts with the labour market and generates macroeconomic fluctuations. As shown in the agent-based numerical simulation, the model provides a new interpretation of the business cycle and an explanation for the empirical phenomenon of countercyclical mark up.
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http://www.springer.com/economics/journal/40797
Aggregate income distribution; Cycles; Industrial organization; Macroeconomics; Economics, Econometrics and Finance (all)2001 Economics, Econometrics and Finance (miscellaneous)
Mazzoli, Marco; Morini, Matteo; Terna, Pietro
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/2318/1651210
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