A Possibility of Protracted Output Gaps in an Economy without Any Rigidity

Taiji Harashima

Microeconomics from EconWPA

Abstract: The paper examines a new possibility of output gaps in an economy without any rigidity. The driving force behind the new possibility is non-cooperative behavior of consumers. The paper shows that there is a possibility that when a fundamental shock hits an economy this non- cooperative nature makes consumers deviate form the optimal path of the representative consumer, and thus agents do not jump consumption and proceed on the deviated transition path.

Keywords: Output gaps; Disequilibrium; Intertemporal consumer choice; Business fluctuations (search for similar items in EconPapers)
JEL-codes: D50 D91 E32 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-mac
Date: 2004-04-24
Note: Type of Document - pdf; pages: 48

Downloads: (external link)
http://129.3.20.41/eps/mic/papers/0404/0404007.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:wpa:wuwpmi:0404007

Access Statistics for this paper

More papers in Microeconomics from EconWPA
Series data maintained by EconWPA ().