NBER WORKING PAPER SERIES PRESENCE OF MULTIPLE EQUILIBRIA
... There are now a plethora of examples of economies which exhibit multiple equilibria. These examples exist (even thrive) in almost all aspects of economics: business cycle theory, open economy macroeconomics, game theory, growth theory, income distribution, industrial organization, labor, etc. The po ...
... There are now a plethora of examples of economies which exhibit multiple equilibria. These examples exist (even thrive) in almost all aspects of economics: business cycle theory, open economy macroeconomics, game theory, growth theory, income distribution, industrial organization, labor, etc. The po ...
Microeconomics II Solutions to problem set 1
... Algebrically, for any economy (i.e. given endowments) with individuals that are locally non satiated (LNS), an interior equilibrium allocation satisfies the condition that MRSs equal the ratio of market prices. The latest holds as a consequence of individual optimality. Geometrically, in the box-eco ...
... Algebrically, for any economy (i.e. given endowments) with individuals that are locally non satiated (LNS), an interior equilibrium allocation satisfies the condition that MRSs equal the ratio of market prices. The latest holds as a consequence of individual optimality. Geometrically, in the box-eco ...
The AS-AD model
... LRAS : In the long run, the productive capacity of the economy does not depend on prices SRAS : A change in prices changes the real cost of labour, affecting the productive capacity of the economy. ...
... LRAS : In the long run, the productive capacity of the economy does not depend on prices SRAS : A change in prices changes the real cost of labour, affecting the productive capacity of the economy. ...
The AS-AD model
... LRAS : In the long run, the productive capacity of the economy does not depend on prices SRAS : A change in prices changes the real cost of labour, affecting the productive capacity of the economy. ...
... LRAS : In the long run, the productive capacity of the economy does not depend on prices SRAS : A change in prices changes the real cost of labour, affecting the productive capacity of the economy. ...
NBER WORKING PAPER SERIES THE THEORY AND MEASUREMENT OF MACROECONOMIC DISEQUILIBRIUM IN
... and Stephen Yeo, none of whom bears any responsibility for this paper. Nor do those who have commented on the paper, including Joe Brada, Wojtek Charemza, Paul Hare, Ed Hewett, Alec Nove, and Tom Wolf. The paper was written for a Festschrift in honor of Franklyn Holzman. The present version is a rev ...
... and Stephen Yeo, none of whom bears any responsibility for this paper. Nor do those who have commented on the paper, including Joe Brada, Wojtek Charemza, Paul Hare, Ed Hewett, Alec Nove, and Tom Wolf. The paper was written for a Festschrift in honor of Franklyn Holzman. The present version is a rev ...
paper
... the model and by the possibility of switching between di¤erent (dis)equilibrium regimes along the trajectory. An important parameter here is the speed of downward wage adjustment. When that speed is small, i.e. when wages are relatively sluggish downwards, the system converges to the stationary sta ...
... the model and by the possibility of switching between di¤erent (dis)equilibrium regimes along the trajectory. An important parameter here is the speed of downward wage adjustment. When that speed is small, i.e. when wages are relatively sluggish downwards, the system converges to the stationary sta ...
This PDF is a selection from an out-of-print volume from... of Economic Research Volume Title: Rational Expectations and Economic Policy
... I shall assume that the supply of labor is given and insensitive to the real wage in the short run; it will be obvious how to relax that assumption. Any reader of Barro and Grossman (1976) or Malinvaud (1977) will realize that one would have to doctor the aggregate demand function whenever there is ...
... I shall assume that the supply of labor is given and insensitive to the real wage in the short run; it will be obvious how to relax that assumption. Any reader of Barro and Grossman (1976) or Malinvaud (1977) will realize that one would have to doctor the aggregate demand function whenever there is ...
Microfoundations - EUR RePub - Erasmus Universiteit Rotterdam
... observed trade-off between the two measured by the Phillips’ curve, with a Walrasian notion of market clearing. Early models, such as Lucas and Rapping (1969) and Lucas (1972) stressed the idea that incomplete information regarding the money supply may cause business fluctuations. Later real busines ...
... observed trade-off between the two measured by the Phillips’ curve, with a Walrasian notion of market clearing. Early models, such as Lucas and Rapping (1969) and Lucas (1972) stressed the idea that incomplete information regarding the money supply may cause business fluctuations. Later real busines ...
Microfoundations
... observed trade-off between the two measured by the Phillips’ curve, with a Walrasian notion of market clearing. Early models, such as Lucas and Rapping (1969) and Lucas (1972) stressed the idea that incomplete information regarding the money supply may cause business fluctuations. Later real busines ...
... observed trade-off between the two measured by the Phillips’ curve, with a Walrasian notion of market clearing. Early models, such as Lucas and Rapping (1969) and Lucas (1972) stressed the idea that incomplete information regarding the money supply may cause business fluctuations. Later real busines ...
Theoretical and Econometric Modeling of Disequilibrium
... good, labor, and money) and three agents (a consumer, a producer, and government). Malinvaud (1977) introduced the now familiar concepts of Keynesian and classical unemployment. These models were attempts at obtaining Keynesian results in models where economic • agents are rational maximizing decisi ...
... good, labor, and money) and three agents (a consumer, a producer, and government). Malinvaud (1977) introduced the now familiar concepts of Keynesian and classical unemployment. These models were attempts at obtaining Keynesian results in models where economic • agents are rational maximizing decisi ...
NBER WORKING PAPER David Romer Working Paper No. 2327
... written independently and should be viewed as complementary.) Cooper (1987) presents a model of labor and commodity contracts in which both predetermined nominal prices and full indexation to nominal shocks are equilibria. ...
... written independently and should be viewed as complementary.) Cooper (1987) presents a model of labor and commodity contracts in which both predetermined nominal prices and full indexation to nominal shocks are equilibria. ...
short-run macroeconomic equilibrium
... Long-Run Macroeconomic Equilibrium The economy is in long-run macroeconomic equilibrium when the point of short-run macroeconomic equilibrium is on the long-run aggregate supply curve. ...
... Long-Run Macroeconomic Equilibrium The economy is in long-run macroeconomic equilibrium when the point of short-run macroeconomic equilibrium is on the long-run aggregate supply curve. ...
“During the recent tax season we reduced prices for our Quicken
... 4. Explore time-variation in these causes 5. Link this new evidence to aggregate inflation ...
... 4. Explore time-variation in these causes 5. Link this new evidence to aggregate inflation ...
This PDF is a selection from an out-of-print volume from... of Economic Research Volume Title: Import Competition and Response
... We begin with the case in whichp; andpg both drop, leaving the relative price ratio IT* unaffected. The advantage of considering this case first is that such a change does not alter the general equilibrium curves in figure 2.2!2At given pricePo and nominal wage level wjthe effect of a fall inpg is t ...
... We begin with the case in whichp; andpg both drop, leaving the relative price ratio IT* unaffected. The advantage of considering this case first is that such a change does not alter the general equilibrium curves in figure 2.2!2At given pricePo and nominal wage level wjthe effect of a fall inpg is t ...
Impact of Shocks to Aggregate Demand and Aggregate Supply on
... FPt is a fiscal policy variable (budget deficit), t t ...
... FPt is a fiscal policy variable (budget deficit), t t ...
Post Keynesian DSGE Theory
... Who knows? Who cares? I believe that intellectuals are, or should be, inclusive in their acceptance of alternative approaches to interesting questions and I am not going to propose a Keynesian version of the Nicene Creed. If you self-identify as Post-Keynesian; that’s good enough for me. I do think, ...
... Who knows? Who cares? I believe that intellectuals are, or should be, inclusive in their acceptance of alternative approaches to interesting questions and I am not going to propose a Keynesian version of the Nicene Creed. If you self-identify as Post-Keynesian; that’s good enough for me. I do think, ...
Uniqueness, Stability and Gross Substitutes Arrow-Debreu Economy
... endowment ! i which contains a positive amount of each good. Each consumer must pay a tax on the value of his or her gross consumption of each good, and these tax rates may vary across goods and consumers. Thus if consumer i buys xij units of good j when the price for good j is pj , the tax she pays ...
... endowment ! i which contains a positive amount of each good. Each consumer must pay a tax on the value of his or her gross consumption of each good, and these tax rates may vary across goods and consumers. Thus if consumer i buys xij units of good j when the price for good j is pj , the tax she pays ...
New Keynesian macroeconomics: Entry For New Palgrave
... wage contracts take the form of a nominal wage being set for a period of 4 quarters. However, wages in different sectors are negotiated at different times. It is usually assumed that there are 4 equally sized cohorts, one cohort resetting the wage each quarter. Whilst this framework does not explain ...
... wage contracts take the form of a nominal wage being set for a period of 4 quarters. However, wages in different sectors are negotiated at different times. It is usually assumed that there are 4 equally sized cohorts, one cohort resetting the wage each quarter. Whilst this framework does not explain ...
Ned Phelps’ Contributions as Viewed from Today through My
... finds him/herself laid off A firm finds the inventories piling up There is no “choice” about the amount to produce or to work; it’s a CONSTRAINT A firm has no “choice” but to cut production when sales evaporate. It has nothing to do with incorrect expectations of the price level ...
... finds him/herself laid off A firm finds the inventories piling up There is no “choice” about the amount to produce or to work; it’s a CONSTRAINT A firm has no “choice” but to cut production when sales evaporate. It has nothing to do with incorrect expectations of the price level ...
NBER WORKING PAPER SERIES HISTORY VS. EXPECTATIONS Paul Krugman Working Paper No. 2971
... prophecy. This paper uses a simple trade model with both external economies and adjustment costs to show how the parameters of the economy determine the relative importance of history and expectations in determining equilibrium. ...
... prophecy. This paper uses a simple trade model with both external economies and adjustment costs to show how the parameters of the economy determine the relative importance of history and expectations in determining equilibrium. ...
Ito Technical Working Paper No. 1
... as constants. Furthermore, the distribution of profits by firms will play no role, for the sake of simplicity. There are two possible explanations: (i) profits of the current period are distributed only in the following period and consumers may not borrow against them; or (ii) the government has lev ...
... as constants. Furthermore, the distribution of profits by firms will play no role, for the sake of simplicity. There are two possible explanations: (i) profits of the current period are distributed only in the following period and consumers may not borrow against them; or (ii) the government has lev ...
1. Main points - chass.utoronto
... Assume that the Aggregate Demand is expected to shift upwards. Due to this expectation, rational agents will expect higher prices, let’s say: PB. This expectation leads workers to demand higher nominal wages at each level of their working effort, to which firms concede as they expect that their high ...
... Assume that the Aggregate Demand is expected to shift upwards. Due to this expectation, rational agents will expect higher prices, let’s say: PB. This expectation leads workers to demand higher nominal wages at each level of their working effort, to which firms concede as they expect that their high ...
NBER WORKING PAPER SERIES STABILIZATION POLICIES IN THE WORLD ECONOMY: Jeffrey Sachs
... Actual wages (w) can deviate in the short run from B, because of unanticipated or accelerating inflation. The bargained wage itself is assumed to respond only to unemployment, in order to capture the partial real wage rigidity I have discussed above. ...
... Actual wages (w) can deviate in the short run from B, because of unanticipated or accelerating inflation. The bargained wage itself is assumed to respond only to unemployment, in order to capture the partial real wage rigidity I have discussed above. ...
Determinacy and Indeterminacy of Equilibrium
... is the focus of this essay. The following section lays out the basic question of determinacy of equilibrium in finite exchange economies, and sketches the results. Section 3 describes the general underlying principles, together with various applications and extensions. Section 4 concludes by examini ...
... is the focus of this essay. The following section lays out the basic question of determinacy of equilibrium in finite exchange economies, and sketches the results. Section 3 describes the general underlying principles, together with various applications and extensions. Section 4 concludes by examini ...