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Dynamic Macroeconomics with Imperfect Competition

  • Leo Kaas

Part of the Lecture Notes in Economics and Mathematical Systems book series (LNE, volume 475)

Table of contents

  1. Front Matter
    Pages i-xi
  2. Leo Kaas
    Pages 1-10
  3. Leo Kaas
    Pages 139-141
  4. Back Matter
    Pages 143-164

About this book

Introduction

This thesis was stimulated throughout the time of my participation in a research project on Dynamic Macroeconomics, supported by the German Research Foundation (DFG). The starting point was the central question of how to integrate price setting firms in a dynamic disequilibrium model. Almost all recent literature on imperfect competition in macroeconomics applies the objective demand approach by assuming that firms know the true demand curve they are faced with. While this approach can be ap­ plied in temporary monetary equilibrium models, it proves inadequate for formulating price adjustment in a dynamic disequilibrium model, where it has to be replaced by the concept of subjective demand. Based on this distinction, the thesis starts out with a comparison of the concepts of subjective and objective demand in an abstract framework and surveys the literature on general equilibrium theory with imperfect competition. The objective demand approach is criticized not only on the grounds of its strong rationality requirements and existence problems, but also by the observation that it cannot be applied successfully to characterize determinate rational expectations equilibria in intertemporal macroeco­ nomics. Finally, price setting firms using subjective demand functions are integrated in a dynamic disequilibrium model in order to study mo­ nopolistic and oligopolistic price adjustment.

Keywords

Dynamische Makroökonomie Gleichgewicht Makroökonomie dynamic dynamische Gleichgewichtstheorie economics employment equilibrium general equilibrium general equilibrium theory imperfect cpmpetition macro economy macroeconomics unemployment unvollkommene Konkurrenz

Authors and affiliations

  • Leo Kaas
    • 1
  1. 1.Department of EconomicsInstitute for Advanced StudiesViennaAustria

Bibliographic information

  • DOI https://doi.org/10.1007/978-3-642-58479-4
  • Copyright Information Springer-Verlag Berlin Heidelberg 1999
  • Publisher Name Springer, Berlin, Heidelberg
  • eBook Packages Springer Book Archive
  • Print ISBN 978-3-540-66029-3
  • Online ISBN 978-3-642-58479-4
  • Series Print ISSN 0075-8442
  • Buy this book on publisher's site
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