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General Equilibrium Models

  • Patricia Dörr
Chapter
Part of the BestMasters book series (BEST)

Abstract

The main characteristic of a basic NK model is the introduction of price stickiness in the production sector. In order to achieve this, NK models include two market imperfections: First, price rigidities require firms not to be price takers, hence some type of market power has to be introduced. Usually, this leads to the design of monopolistic competition models.

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Copyright information

© Springer Fachmedien Wiesbaden GmbH, part of Springer Nature 2018

Authors and Affiliations

  1. 1.TrierGermany

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