TY  - JOUR
AU  - Chatterjee,Satyajit
AU  - Cooper,Russell
TI  - Entry and Exit, Product Variety and the Business Cycle
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 4562
PY  - 1993
Y2  - December 1993
UR  - http://www.nber.org/papers/w4562
L1  - http://www.nber.org/papers/w4562.pdf
N1  - Author contact info:
Satyajit Chatterjee
Research Department
Federal Reserve Bank
10 Independence Mall
Philadelphia, PA  19106
E-Mail: chatterjee.satyajit@gmail.com

Russell Cooper
Department of Economics
European University Institute
via della Piazzola, 43
Firenze, 50133
ITALY
E-Mail: russellcoop@gmail.com
AB  - We study the stochastic behavior of a dynamic general equilibrium model with monopolistic competition.  Each seller sells his product in the consumption goods as well as the investment goods market and has market power in both.  Consumers derive utility from a CES aggregate of all the consumption goods and augment their capital stock by a CES aggregate of all the investment goods.  We analyze the equilibrium of this economy allowing for an endogenous determination of the number of firms and therefore of products.  The principal effect we highlight is the endogenous propagation and magnification of technology and preference disturbances through product space variations.
ER  -