Show simple item record

dc.contributor.authorCORSETTI, Giancarlo
dc.contributor.authorBERGIN, Paul
dc.date.accessioned2006-02-06T13:07:39Z
dc.date.available2006-02-06T13:07:39Z
dc.date.issued2005
dc.identifier.urihttp://hdl.handle.net/1814/3996
dc.description.abstractThis paper explores the role of stabilization policy in a model where firm entry responds to shocks and uncertainty. We evaluate stabilization policy in the context of a simple analytically solvable sticky price model, where firms have to prepay a fixed cost of entry. The presence of endogenous entry can alter the dynamic response to shocks, leading to greater persistence in the effects of monetary and real shocks. Entry affects welfare, depending on the love of variety in consumption and investment, as well as its implications for market competitiveness. In this context, monetary policy has an additional role in regulating the optimal number of entrants, as well as the optimal level of production at each firm. We find that the same monetary policy rule optimal for regulating the scale of production in familiar sticky price models without entry, also generates the amount of (endogenous) entry corresponding to a flex-price equilibrium.en
dc.format.extent0 bytes
dc.format.mimetypetext/plain
dc.language.isoenen
dc.relation.ispartofseries2005/5376en
dc.relation.ispartofseriesCEPR Discussion Paperen
dc.titleTowards a Theory of Firm Entry and Stabilization Policyen
dc.typeWorking Paperen
dc.neeo.contributorCORSETTI|Giancarlo|aut|EUI70002
dc.neeo.contributorBERGIN|Paul|aut|
eui.subscribe.skiptrue


Files associated with this item

FilesSizeFormatView

There are no files associated with this item.

This item appears in the following Collection(s)

Show simple item record