The Macroeconomics of Imperfect Competition and Nonclearing Markets - Table of Contents

December 2002
6 x 9, 288 pp., 21 illus.
$40.00/£29.95 (CLOTH)
Short

ISBN-10:
0-262-02528-0
ISBN-13:
978-0-262-02528-7

Paper (2005)

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The Macroeconomics of Imperfect Competition and Nonclearing Markets
A Dynamic General Equilibrium Approach
Jean-Pascal Bénassy

	Preface Sample Chapter - Download PDF (34 KB)			xi

I	From Microeconomics to Macroeconomics			1

1	Basic Concepts Sample Chapter - Download PDF (108 KB)			3

		1.1	Introduction	3

		1.2	Walrasian Theory: The Missing Parts	3

		1.3	Transactions in Nonclearing Markets	7

		1.4	Quantity Signals	11

		1.5	Effective Demand and Supply	13

		1.6	The Formation of Prices	15

		1.7	Conclusions	20

		1.8	References	20

			Appendix 1.1: Manipulable Rationing Schemes	21

2	A Simple Macroeconomic Example			25

		2.1	Introduction	25

		2.2	The Economy	25

		2.3	Walrasian Equilibrium	27

		2.4	Fixprice-Fixwage Equilibria	28

		2.5	An Imperfectly Competitive Model	35

		2.6	Conclusions	38

		2.7	References	38

II	General Equilibrium			41

3	General Equilibrium Concepts			43

		3.1	Introduction	43

		3.2	Walrasian Equilibrium	43

		3.3	Rationing Schemes and Quality Signals	45

		3.4	Fixprice Equilibria	49

		3.5	Price Setting and General Equilibrium	55

		3.6	Optimality	58

		3.7	Conclusions	65

		3.8	References	65

			Appendix 3.1: Proof of Proposition 1	66

III	Imperfect Competition, Underemployment, and Welfare			69

4	Are Imperfect Competition Models Keynesian?			71

		4.1	Introduction	71

		4.2	The Model	72

		4.3	Objective Demand Curves	74

		4.4	The Imperfect Competition Equilibrium	77

		4.5	Apparent Keynisian Inefficiencies	80

		4.6	The Impact of Government Policies	81

		4.7	Conclusions	83

		4.8	References	84

			Appendix 4.1: Welfare Paradox	85

5	Bargaining Power, Underemployment, and Welfare			87

		5.1	Introduction	87

		5.2	The Model	89

		5.3	Price Setting and Equilibrium	90

		5.4	Wage Negotiations	93

		5.5	General Equilibrium	97

		5.6	Bargaining Power and Global Efficiency	98

		5.7	Conclusions	100

		5.8	References	100

IV	Imperfect Competition, Fluctuations, and Growth			101

6	Fluctuations and Imperfect Competition			103

		6.1	Introduction	103

		6.2	The Model	104

		6.3	Resolution	106

		6.4	Properties of the Dynamic Equilibrium	109

		6.5	Conclusions	111

		6.6	References	112

7	Unemployment Persistence			113

		7.1	Introduction	113

		7.2	The Model	114

		7.3	Resolution	116

		7.4	The Two Regimes: Dynamic and Persistence	120

		7.5	Numerical Simulations	122

		7.6	Conclusions	125

		7.7	References	126

8	Endogenous Growth			127

		8.1	Introduction	127

		8.2	The Model	128

		8.3	Dynamic Equilibrium	129

		8.4	Resolution	130

		8.5	Dynamics and the Growth Rate	134

		8.6	Conclusions	135

		8.7	References	136

			Appendix 8.1: Different Production Functions	136

V	Nominal Rigidities and Fluctuations			139

9	Wage Rigidities and Employment Fluctuations			141

		9.1	Introduction	141

		9.2	The Model	142

		9.3	The Walrasian Regime	143

		9.4	Wage Contracts	147

		9.5	The Cyclical Behavior of Real Wages, Prices, and Inflation	150

		9.6	Endogenizing Wage Formation	152

		9.7	Conclusions	156

		9.8	References	157

			Appendix 9.1: Incomplete Depreciation	158

10	Staggered Contracts and Persistence			161

		10.1	Introduction	161

		10.2	The Model	162

		10.3	The Walrasian Regime	164

		10.4	Wage Contracts	165

		10.5	Macroeconomic Dynamics	170

		10.6	Conclusions	176

		10.7	References	177

			Appendix 10.1: Incomplete Depreciation	177

			Appendix 10.2: Aggregation across Output Types	178

			Appendix 10.3: Proofs of Propositions 2 and 4	181

11	Market Power, Voluntary Exchange, and Unemployment Fluctuations			187

		11.1	Introduction	187

		11.2	The Model	188

		11.3	Equilibrium with Flexible Wages	188

		11.4	Preset Wages	191

		11.5	Macroeconomic Equilibrium	194

		11.6	Conclusions	195

		11.7	References	196

			Appendix 11.1: Storability and the Probability of Rationing	196

VI	Economic Policy			201

12	Nominal Rigidities and Policy Activism			203

		12.1	Introduction	203

		12.2	The Model	204

		12.3	Walrasian Equilibrium	206

		12.4	Optimality	208

		12.5	Preset Wages	209

		12.6	The Optimality of Activist Policies	211

		12.7	Conclusions	214

		12.8	References	214

			Appendix 12.1: The Sargent-Wallace Argument	215

			Appendix 12.2: Taxing All Households	217

			Appendix 12.3: A Robustness Argument	220

13	Imperfect Competition and Activist Policies			221

		13.1	Introduction	221

		13.2	The Model	221

		13.3	Some Basic Relations	222

		13.4	Flexible Prices and Wages	225

		13.5	Preset Wages	227

		13.6	Optimal Government Policy	228

		13.7	Conclusions	230

14	The Optimal Policy Mix			231

		14.1	Introduction	231

		14.2	The Model	232

		14.3	General Equilibrium Relations	234

		14.4	Optimality	236

		14.5	Walrasian Equilibrium	237

		14.6	Preset Wages	239

		14.7	Preset Prices	242

		14.8	Conclusions	245

		14.9	References	246

15	Monetary Rules and Fiscal Policy			247

		15.1	Introduction	247

		15.2	The Model	248

		15.3	General Equilibrium Relations	249

		15.4	Preset Wages Equilibria	251

		15.5	The Optimal Monetary Rule	252

		15.6	The Optimal Policy Mix	254

		15.7	A Comparison	255

		15.8	Conclusions	256

		15.9	References	256

	Bibliography			257

	Index Sample Chapter - Download PDF (16 KB)			271

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