The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Dynamic Models with Non-clearing Markets

  • Jean-Pascal Bénassy
Reference work entry
DOI: https://doi.org/10.1057/978-1-349-95189-5_2100

Abstract

This article studies a new class of models which synthesize the two traditions of general equilibrium with non-clearing markets and imperfect competition on the one hand, and dynamic stochastic general equilibrium (DSGE) models on the other hand. This line of models has become a central paradigm of modern macroeconomics for at least three reasons: (a) it displays solid microeconomic foundations, (b) it is a highly synthetic theory, which combines in a unified framework general equilibrium, non-clearing markets, imperfect competition, growth theory and rational expectations, and (c) it is also an empirical success, leading to substantial progress towards matching real world statistics.

Keywords

Budget constraints Dynamic models with non-clearing markets Dynamic stochastic general equilibrium (DSGE) models Efficiency wages Fixprice macroeconomic model General equilibrium Growth theory Implicit contracts IS–LM model Keynesianism Market clearing Menu costs Microfoundations Monetary shocks Monopolistic competition Nominal rigidities Non-clearing markets in general equilibrium Objective demand curve Phillips curve Quantity constraint Quantity signals Rational expectations Real business cycles State dependent price rigidities Sticky prices Technological shocks Time-dependent contracts Walrasian equilibrium 
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Copyright information

© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • Jean-Pascal Bénassy
    • 1
  1. 1.