Home Production Meets Time to Build

Posted: 15 Oct 2001

See all articles by Paul Gomme

Paul Gomme

Concordia University; CIREQ

Finn Kydland

Carnegie Mellon University - David A. Tepper School of Business; Norwegian School of Economics (NHH) - Department of Economics

Peter Rupert

University of California, Santa Barbara (UCSB) - Department of Economics

Abstract

An innovation in this paper is to introduce a time-to-build technology for the production of market capital into a model with home production. Our main finding is that the two anomalies that have plagued all household production models--the positive correlation between business and household investment, and household investment's leading business investment over the business cycle--are resolved when time to build is added.

Suggested Citation

Gomme, Paul and Kydland, Finn E. and Rupert, Peter, Home Production Meets Time to Build. Journal of Political Economy, Vol. 109, October 2001, Available at SSRN: https://ssrn.com/abstract=280274

Paul Gomme

Concordia University ( email )

1455 de Maisonneuve Blvd. W.
Montreal, Quebec H3G 1MB
Canada

CIREQ ( email )

C.P. 6128, Succursale Centre-ville
Montreal, Quebec H3C 3J7
Canada

Finn E. Kydland (Contact Author)

Carnegie Mellon University - David A. Tepper School of Business ( email )

5000 Forbes Avenue
Pittsburgh, PA 15213-3890
United States
412 268-3691 (Phone)
412 268-7357 (Fax)

Norwegian School of Economics (NHH) - Department of Economics

Helleveien 30
N-5035 Bergen
Norway

Peter Rupert

University of California, Santa Barbara (UCSB) - Department of Economics ( email )

2127 North Hall
Santa Barbara, CA 93106
United States

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