Macroeconomics of Subsistence Points

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dc.contributor.author RAVN, Morten O.
dc.contributor.author SCHMITT-GROHE, Stephanie
dc.contributor.author URIBE, Martin
dc.date.accessioned 2011-04-19T12:49:19Z
dc.date.available 2011-04-19T12:49:19Z
dc.date.issued 2008
dc.identifier.citation Macroeconomic Dynamics, 2008, 12, 136-147
dc.identifier.issn 1365-1005
dc.identifier.uri http://hdl.handle.net/1814/16600
dc.description.abstract This paper explores the macroeconomic consequences of preferences displaying a subsistence point. It departs from the existing related literature by assuming that subsistence points are specific to each variety of goods rather than to the composite consumption good. We show that this simple feature makes the price elasticity of demand for individual goods procyclical. As a result, markups behave countercyclically in equilibrium. This implication is in line with the available empirical evidence.
dc.language.iso en
dc.publisher Cambridge Univ Press
dc.subject nonhomothetic preferences
dc.subject time-varying markups
dc.subject business cycles
dc.title Macroeconomics of Subsistence Points
dc.type Article
dc.identifier.doi 10.1017/S1365100507070095
dc.neeo.contributor RAVN|Morten O.|aut|
dc.neeo.contributor SCHMITT-GROHE|Stephanie|aut|
dc.neeo.contributor URIBE|Martin|aut|
dc.identifier.volume 12
dc.identifier.startpage 136
dc.identifier.endpage 147
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