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How do changes in market structure affect the US business cycle? We estimate a monetary DSGE model with endogenous
rm/product entry and a translog expenditure function by Bayesian methods. The dynamics of net business formation allow us to identify the 'competition effect', by which desired price markups and inflation decrease when entry rises. We
find that a 1 percent increase in the number of competitors lowers desired markups by 0.18 percent. Most of the cyclical variability in inflation is driven by markup fluctuations due to sticky prices or exogenous shocks rather than endogenous changes in desired markups.
How do changes in market structure affect the US business cycle? We estimate a monetary DSGE model with endogenous
rm/product entry and a translog expenditure function by Bayesian methods. The dynamics of net business formation allow us to identify the 'competition effect', by which desired price markups and inflation decrease when entry rises. We
find that a 1 percent increase in the number of competitors lowers desired markups by 0.18 percent. Most of the cyclical variability in inflation is driven by markup fluctuations due to sticky prices or exogenous shocks rather than endogenous changes in desired markups.
Many successful invasions involve long initial periods in which the invader exists at low densities followed by sudden population increases. The reasons for such time-lags remain poorly understood. Here we document a sudden increase in density of the introduced Japanese white-eye (Zosterops japonicus) in a restoration area contiguous with old-growth forest at Hakalau Forest National Wildlife Refuge on the Island of Hawaii. The refuge, with very high density of native birds, existed in a pocket of low whiteeye density that persisted for at least 20 years since the late 1970s. The refuge began an extensive native trees restoration project in 1989 within a 1314 ha abandoned pasture above old-growth forest. This area was soon colonized by white-eyes and their population grew exponentially once the trees had grown tall enough to develop a canopy. This increase was in turn followed by significantly more white-eyes in the open and closed forests adjacent to the restoration area. Competition between white-eyes and native species was documented on study sites within these forests. Density data indicate that competition was more widespread, with loss of tens of thousands of native birds in the 5371 ha area surveyed. Our results are consistent with the view that ecological barriers may delay the population increase of invaders and that human-derived activities may help invaders cross these barriers by creating new ecological opportunities. Control of white-eye numbers may be essential for recovery of native species.