Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/104074
Authors: 
Süssmuth, Bernd
Year of Publication: 
2000
Series/Report no.: 
Munich Discussion Paper 2000-1
Abstract: 
This paper combines the recent game theoretic approach of endogenous timing of entry to herding models with a macroeconomic model of investment cycles. The integrated description embodies the qualitative results of the myopic herding model in a medium run investment objective of smoothing the capital stock adjustment process. lt features a completely disaggregated structure and bears the potential to synchronize individual cyclic investing behaviors. This synchronization via nonlinear feedback from the aggregate activity can serve as an explanation of the inexistent cancelling of heterogeneous sectoral quasi-cycles. The model offers an explanatory base for the constitution 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 findings of the herding literature, the stabilization potential of third parties' information revelation is conjectured.
Subjects: 
herding
investment cycles
nonlinear entrainment
JEL: 
D81
D83
E22
E32
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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