A Business-Cycle Model with Cash and Credit Goods and a Modified Cash-in-advance Feature: Lessons for Bulgaria (1999-2020)
The paper augments the standard business cycle model with cash and credit goods following Lucas and Stokey (1983, 1987), together with a modified cash-in-advance (CIA) considerations. In particular, the cash-in-advance constraint was extended to include private investment and government purchases. T...
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| Language: | English |
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Wydawnictwo Uniwersytetu Ekonomicznego we Wrocławiu
2022-01-01
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| Series: | Ekonometria |
| Online Access: | https://journals.ue.wroc.pl/eada/article/view/954 |
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| _version_ | 1849739336528953344 |
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| author | Aleksandar Vasilev |
| author_facet | Aleksandar Vasilev |
| author_sort | Aleksandar Vasilev |
| collection | DOAJ |
| description | The paper augments the standard business cycle model with cash and credit goods following Lucas and Stokey (1983, 1987), together with a modified cash-in-advance (CIA) considerations. In particular, the cash-in-advance constraint was extended to include private investment and government purchases. This specification was then calibrated to Bulgaria during the 1999-2020 period. The presence of cash and credit goods give a role to money in accentuating economic fluctuations. In particular, the two types of goods and the modified CIA constraint produce a more sophisticated propagation mechanism, with novel trade-offs faced by households. The model generates too volatile consumption, and countercyclical investment, which are at serious odds with the data. Overall, the model with cash and credit goods, and physical capital accumulation, did not provide a good framework to study business cycle fluctuations in Bulgaria.(original abstract) |
| format | Article |
| id | doaj-art-d4e10c99cf194f7bbf000437be5eb109 |
| institution | DOAJ |
| issn | 2449-9994 |
| language | English |
| publishDate | 2022-01-01 |
| publisher | Wydawnictwo Uniwersytetu Ekonomicznego we Wrocławiu |
| record_format | Article |
| series | Ekonometria |
| spelling | doaj-art-d4e10c99cf194f7bbf000437be5eb1092025-08-20T03:06:17ZengWydawnictwo Uniwersytetu Ekonomicznego we WrocławiuEkonometria2449-99942022-01-01nr 1955A Business-Cycle Model with Cash and Credit Goods and a Modified Cash-in-advance Feature: Lessons for Bulgaria (1999-2020)Aleksandar Vasilev0University of Lincoln, Lincoln, United KingdomThe paper augments the standard business cycle model with cash and credit goods following Lucas and Stokey (1983, 1987), together with a modified cash-in-advance (CIA) considerations. In particular, the cash-in-advance constraint was extended to include private investment and government purchases. This specification was then calibrated to Bulgaria during the 1999-2020 period. The presence of cash and credit goods give a role to money in accentuating economic fluctuations. In particular, the two types of goods and the modified CIA constraint produce a more sophisticated propagation mechanism, with novel trade-offs faced by households. The model generates too volatile consumption, and countercyclical investment, which are at serious odds with the data. Overall, the model with cash and credit goods, and physical capital accumulation, did not provide a good framework to study business cycle fluctuations in Bulgaria.(original abstract)https://journals.ue.wroc.pl/eada/article/view/954 |
| spellingShingle | Aleksandar Vasilev A Business-Cycle Model with Cash and Credit Goods and a Modified Cash-in-advance Feature: Lessons for Bulgaria (1999-2020) Ekonometria |
| title | A Business-Cycle Model with Cash and Credit Goods and a Modified Cash-in-advance Feature: Lessons for Bulgaria (1999-2020) |
| title_full | A Business-Cycle Model with Cash and Credit Goods and a Modified Cash-in-advance Feature: Lessons for Bulgaria (1999-2020) |
| title_fullStr | A Business-Cycle Model with Cash and Credit Goods and a Modified Cash-in-advance Feature: Lessons for Bulgaria (1999-2020) |
| title_full_unstemmed | A Business-Cycle Model with Cash and Credit Goods and a Modified Cash-in-advance Feature: Lessons for Bulgaria (1999-2020) |
| title_short | A Business-Cycle Model with Cash and Credit Goods and a Modified Cash-in-advance Feature: Lessons for Bulgaria (1999-2020) |
| title_sort | business cycle model with cash and credit goods and a modified cash in advance feature lessons for bulgaria 1999 2020 |
| url | https://journals.ue.wroc.pl/eada/article/view/954 |
| work_keys_str_mv | AT aleksandarvasilev abusinesscyclemodelwithcashandcreditgoodsandamodifiedcashinadvancefeaturelessonsforbulgaria19992020 AT aleksandarvasilev businesscyclemodelwithcashandcreditgoodsandamodifiedcashinadvancefeaturelessonsforbulgaria19992020 |