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- W2193669204 abstract "Most models subjected to news shocks fail to re-produce the basic aggregate comovement facts. This paper proposes that firm entry can be a channel for the real business cycle model to generate quantitatively realistic expectations-driven fluctuations. Endogenous variation in products supports aggregate comovement in response to contemporaneous shocks and news about future technology. This occurs easily even if, as argued by recent empirical studies, markups are procyclical. The model matches the key second moments of U.S. business cycles. The findings highlight the importance of future work on the implications of news-driven firm entry and its interaction with markups for optimal policy." @default.
- W2193669204 created "2016-06-24" @default.
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- W2193669204 date "2016-01-01" @default.
- W2193669204 modified "2023-09-27" @default.
- W2193669204 title "Can firm entry explain news-driven fluctuations?" @default.
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- W2193669204 doi "https://doi.org/10.1016/j.econmod.2015.09.023" @default.
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