Coordinating business cycles
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- dc.contributor.author Schaal, Edouard
- dc.contributor.author Taschereau-Dumouchel, Mathieu
- dc.date.accessioned 2025-09-26T16:20:39Z
- dc.date.available 2025-09-26T16:20:39Z
- dc.date.issued 2025
- dc.date.updated 2025-09-26T16:20:39Z
- dc.description Data de publicació electrònica: 22-09-2025
- dc.description.abstract We develop a quantitative theory of business cycles with coordination failures. Because of demand complementarities and increasing returns, firms seek to coordinate production and multiple equilibria arise. We use a global game approach to discipline equilibrium selection and show that the unique dynamic equilibrium exhibits multiple steady states. Coordination on high production may fail after a large transitory shock, pushing the economy in a quasi-permanent recession. Our calibrated model rationalizes various features of the 2007-2009 recession and its recovery. Government spending, while generally harmful, can increase welfare when the economy is transitioning between steady states. Other policy instruments are preferable to fix miscoordination.
- dc.format.mimetype application/pdf
- dc.identifier.citation Schaal E, Taschereau-Dumouchel M. Coordinating business cycles. J Monet Econ. 2025 Sep 22:103829. DOI: 10.1016/j.jmoneco.2025.103829
- dc.identifier.doi http://dx.doi.org/10.1016/j.jmoneco.2025.103829
- dc.identifier.issn 0304-3932
- dc.identifier.uri http://hdl.handle.net/10230/71278
- dc.language.iso eng
- dc.publisher Elsevier
- dc.relation.ispartof Journal of Monetary Economics. 2025 Sep 22:103829.
- dc.rights 0304-3932/© 2025 The Authors. Published by Elsevier B.V. This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/).
- dc.rights.accessRights info:eu-repo/semantics/openAccess
- dc.rights.uri http://creativecommons.org/licenses/by-nc-nd/4.0/
- dc.subject.keyword Business cycles
- dc.subject.keyword Imperfect information
- dc.subject.keyword Global games
- dc.subject.keyword Multiple equilibria
- dc.title Coordinating business cycles
- dc.type info:eu-repo/semantics/article
- dc.type.version info:eu-repo/semantics/publishedVersion