A Business Cycle Model with Sticky Pricing and Endogenous Capital

In this paper, we will study some business cycle models with sticky pricing and endogenous and firm-specific capital. We also manage to incorporate capital utilization into the models. As revealed by the simulation results, the cyclical behaviors of our business cycle models are quite normal compared with the literature and those of the actual economy except the simulated correlations between inflation and output. Such simulation result is mainly because in symmetric equilibriums, money in our models turns out to be superneutral.

Alliances and entry in a simple airline network

This paper constructs an entry and code-sharing alliances game to demonstrate that the alliance between the incumbent carriers may play a significant role of entry deterrence in a given airline network. We show that incumbents can use the alliances as a credible threat to deter the entry of the potential entrants who have no significant cost advantage. This finding suggests that the role of the alliance in entry deterrence should be considered carefully when governments promote and maintain competition in the deregulated airline network markets.