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Identifier to cite or link to this item: https://hdl.handle.net/10086/23254

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Title
Threshold behavior and aggregate fluctuation
Creator
Creator Name
Nirei, Makoto Nirei, Makoto
楡井, 誠 楡井, 誠
Affiliation
Affiliation Name
Hitotsubashi University
Rights
Copyright (c) 2004 Elsevier Inc. All rights reserved.
Key Word
Aggregation
Propagation
Cascade
Law of large numbers
Heavy-tailed distribution
(S,s) Policy
Lumpy investment
Menu cost
Strategic complementarity
Best response dynamics
JEL
E1
E3
Abstract
This paper concerns a propagation mechanism in an economy where many individuals follow a threshold rule and interact with a positive feedback. We derive an asymptotic distribution of the propagation size when the number of the agents tends to infinity. The propagation distribution exhibits a slower convergence to a deterministic value than it would if the agents followed a smooth adjustment policy. This gives rise to significant aggregate fluctuations in a finite lumpy-adjusting economy even when the agents are hit by small independent shocks.
Publisher
Elsevier B.V.
Issued Date
2006-03
Language
English(eng)
Resource Type
journal article
Version Type
AM
Is Version OfRelation -
Related Identifier
DOI
  10.1016/j.jet.2004.08.006
ISSN
0022-0531
NCID
AA0024175X
Source Title
Journal of Economic Theory
Volume Number
127
Issue Number
1
Page Start
309
Page End
322
Appears in Collections
010a Journal Articles　=　雑誌掲載論文
URL
https://hdl.handle.net/10086/23254