Threshold nonlinearities and asymmetric endogenous business cycles

Junichiro Ishida; Masanori Yokoo

doi:10.1016/j.jebo.2003.04.006

Threshold nonlinearities and asymmetric endogenous business cycles

Junichiro Ishida, Masanori Yokoo

Research output: Contribution to journal › Article › peer-review

5 Citations (Scopus)

Abstract

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.

Original language	English
Pages (from-to)	175-189
Number of pages	15
Journal	Journal of Economic Behavior and Organization
Volume	54
Issue number	2
DOIs	https://doi.org/10.1016/j.jebo.2003.04.006
Publication status	Published - Jun 2004

Keywords

Asymmetric periodic cycles
Knowledge spillovers
Piecewise linear difference equation
Threshold nonlinearities
Time-to-build

ASJC Scopus subject areas

Economics and Econometrics
Organizational Behavior and Human Resource Management

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title = "Threshold nonlinearities and asymmetric endogenous business cycles",

abstract = "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.",

keywords = "Asymmetric periodic cycles, Knowledge spillovers, Piecewise linear difference equation, Threshold nonlinearities, Time-to-build",

author = "Junichiro Ishida and Masanori Yokoo",

note = "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. ",

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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

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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.

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KW - Piecewise linear difference equation

KW - Threshold nonlinearities

KW - Time-to-build

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Threshold nonlinearities and asymmetric endogenous business cycles

Abstract

Keywords

ASJC Scopus subject areas

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