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Recent empirical evidence suggests that product creation is procyclical and it occurs largely within existing …rms. Motivated by these …ndings, the current paper investigates the role of intra-…rm product scope choice in a general equilibrium economy with oligopolistic producers. We show that the multi-product nature of …rms makes the economy signi…cantly more susceptible to sunspot equilibria. The estimated indeterminate model generates arti…cial business cycles that closely resemble empirically observed ‡uctuations.

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