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Dynamic Models with Non-clearing Markets

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The New Palgrave Dictionary of Economics

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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.

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  1. http://link.springer.com/referencework/10.1057/978-1-349-95121-5

    Jean-Pascal Bénassy

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Bénassy, JP. (2018). Dynamic Models with Non-clearing Markets. In: The New Palgrave Dictionary of Economics. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-349-95189-5_2100

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