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Volkswirtschaft - Open Access LMU - Teil 01/03 Podcast
Endogenously-Timed Herding And The Synchronization Of Investment Cycles

Endogenously-Timed Herding And The Synchronization Of Investment Cycles

Volkswirtschaft - Open Access LMU - Teil 01/03 vor 26 Jahren

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This paper combines the recent garne theoretic approach of
endogenous timing of entry to herding models with a rnacroeconornic
model of investrnent cycles. The integrated description embodies
the qualitative resuits of the rnyopic herding model in a medium
run investment objective of smooth ing the capital stock adjustment
process. lt features a completely disaggregated structure and bears
the potential to synchronize individual cyclic investing be
haviors. This synchronization via nonlinear feedback from the
aggregate ac tivity can serve as an explanation of the inexistent
cancelling of heterogeneous sectoral quasi-cycles. The model others
an explanatory base for the constitu tion of the observed strong
cyclicality of the aggregate investment series by a multitude of
different periodicities and phases on the individual level.
Finally, based on recent ndings of the herding literature, the
stabilization potential of third parties' information revelation is
conjectured.