Publications [#266246] of Wilbur J. Coleman

Papers Published

1. Coleman, WJ, Behavior of interest rates in a general equilibrium multisector model with irreversible investment, Macroeconomic Dynamics, vol. 1 no. 1 (January, 1997), pp. 206-227, ISSN 1365-1005 [doi]
   (last updated on 2026/01/15)

   Abstract:
   The behavior of the real interest rate in a general equilibrium multisector model with irreversible investment is examined. It is shown that in such a model purely sectoral shocks can lead to substantial variation in the real interest rate and other aggregate time series. A source of variation in aggregate time series that is not found in one-sector models is thus examined, and the implications of this source of variation for the behavior of the interest rate are highlighted. Such a model seems to better capture the relationship among the real interest and output or investment than the standard one-sector stochastic growth model. It is also shown that, because of a desire to smooth consumption, with irreversible investment a rise in uncertainty concerning the future return to capital tends to lead to more current investment and a lower real interest rate.