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Essays On Market Structure, Business Cycles And Monetary Economics, Ke Chao

Arts & Sciences Electronic Theses and Dissertations

What contributes to the persistence of economic recessions? How should policy respond to economic crises? The dissertation sheds some new light upon these questions in three chapters. The first chapter explores how market concentration affects business cycles. I build a model featuring the dynamic strategic competition between a forward-looking large firm and a continuum of heterogeneous entrepreneurs who are financially constrained. In the model, the elasticity of demand and the optimal markup of the large firm are determined by the degree of concentration and dynamic strategic considerations. I show that the effect of concentration depends on how the shock alters …