ISBN: 3-540-66029-1
TITLE: Dynamic Macroeconomics with Imperfect Competition
AUTHOR: Kaas, Leo
TOC:

1 Introduction 1
2 Subjective and objective equilibria 11
2.1 Introduction 11
2.2 The basic framework 12
2.3 Perfect foresight and equilibrium concepts 16
2.4 Learning dynamics 21
2.5 Summary 27
3 General equilibrium with imperfect competition 29
3.1 Introduction 29
3.2 Quantity competition 32
3.2.1 The setup 32
3.2.2 Negishi equilibria 36
3.2.3 CournotWalras equilibria 38
3.2.4 CournotWalras equilibria without income feedback 41
3.3 Price competition 47
3.3.1 Some preliminaries 47
3.3.2 Equilibria with Walrasian demand 47
3.3.3 Equilibria with effective demand 52
3.4 Summary 58
4 Intertemporal macroeconomic equilibrium 59
4.1 Introduction 59
4.2 Temporary and intertemporal equilibrium 62
4.3 Indeterminacy of perfect foresight equilibria and involuntary unemployment 66
4.3.1 Hart's model and involuntary unemployment 66
4.3.2 The economy 70
4.3.3 Indeterminacy of perfect foresight equilibria 74
4.3.4 A CES example 79
4.4 Indeterminacy of rational expectations equilibria 86
4.4.1 Are there unique rational forecasts 86
4.4.2 Characterization of rational expectations equilibria 87
4.4.3 Example 1: Intertemporal CournotWalras equilibria 88
4.4.4 Example 2: A market game in an OLG exchange economy 96
4.5 Summary and discussion 101
5 A dynamic macoreconomic model with price setting firms 105
5.1 Introduction 106
5.2 The economy 108
5.2.1 The agents 109
5.2.2 The markets 111
5.2.3 The dynamics 114
5.3 A parametric specification 115
5.3.1 Decision and expectation formation of firms 115
5.3.2 A reduced dynamical system 121
5.4 Analysis of the dynamics 122
5.4.1 The monopolistic case 122
5.4.2 The oligopolistic case 126
5.5 Summary and discussion 136
6 Final remarks 139
List of Figures 143
List of Abbreviations 145
Bibliography 147
END
