TY - JOUR
T1 - Threshold nonlinearities and asymmetric endogenous business cycles
AU - Ishida, Junichiro
AU - Yokoo, Masanori
N1 - Funding Information:
We thank Matti Pohjola, a co-editor of the journal, and an anonymous referee for helpful comments which improve the presentation of the paper. All remaining errors are our own. Financial support by the Japanese Ministry of Education, Culture, Sports, Science and Technology (Grants-in-Aid for Young Scientists (B) 14730013 for Ishida and 14730016 for Yokoo) is gratefully acknowledged.
PY - 2004/6
Y1 - 2004/6
N2 - This paper presents a model of endogenous business cycles in the presence of knowledge spillovers and a time-to-build restriction. There are two key assumptions that characterize the model: (i) the payoff to each firm depends on the aggregate state of knowledge, and (ii) the innovation of a project is time-consuming. Under those assumptions, a simple structure is shown to be described by a piecewise linear difference equation with a discontinuity. We show that the resulting dynamics generated by such a dynamical system leads to an asymmetric periodic cycle of arbitrary period that appears to switch repeatedly between different regimes.
AB - This paper presents a model of endogenous business cycles in the presence of knowledge spillovers and a time-to-build restriction. There are two key assumptions that characterize the model: (i) the payoff to each firm depends on the aggregate state of knowledge, and (ii) the innovation of a project is time-consuming. Under those assumptions, a simple structure is shown to be described by a piecewise linear difference equation with a discontinuity. We show that the resulting dynamics generated by such a dynamical system leads to an asymmetric periodic cycle of arbitrary period that appears to switch repeatedly between different regimes.
KW - Asymmetric periodic cycles
KW - Knowledge spillovers
KW - Piecewise linear difference equation
KW - Threshold nonlinearities
KW - Time-to-build
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U2 - 10.1016/j.jebo.2003.04.006
DO - 10.1016/j.jebo.2003.04.006
M3 - Article
AN - SCOPUS:1842661599
SN - 0167-2681
VL - 54
SP - 175
EP - 189
JO - Journal of Economic Behavior and Organization
JF - Journal of Economic Behavior and Organization
IS - 2
ER -