Macroeconomic coordination failure under oligempory

Gaygisiz E. , Madden P.

Economic Theory, cilt.20, sa.1, ss.93-112, 2002 (SSCI İndekslerine Giren Dergi) identifier identifier

  • Yayın Türü: Makale / Tam Makale
  • Cilt numarası: 20 Konu: 1
  • Basım Tarihi: 2002
  • Doi Numarası: 10.1007/s001990100193
  • Dergi Adı: Economic Theory
  • Sayfa Sayıları: ss.93-112


Each sector of a multi-sector overlapping generations model is an oligempory with a given number of firms, oligopsonists in the sectoral (spatially differentiated) labour market and oligopolists in the sectoral (homogeneous) output market. When there is aggregate unemployment, and a firm raises wages beyond the local full employment level acquiring labour from neighbours, sectoral output supply becomes constant and the firm faces a flat output demand curve under constant returns to labour (upward sloping under decreasing returns). Multiple temporary equilibria and Pareto-ranked steady-state equilibria emerge; the associated sunspot equilibria exhibit counter-cyclical markups, inter alia.