Cycles and Non-Stationary Equilibrium Search

Chaim Fershtman and Arthur Fishman
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Chaim Fershtman: Tel Aviv University
Arthur Fishman: Tel Aviv University

Chapter 6 in Business Cycles, 1991, pp 135-153 from Palgrave Macmillan

Abstract: Abstract There has never been agreement among economists regarding the causes of cycles and fluctuations in economic activity. There can be little doubt that extraneous shocks to the economy are a major source of such fluctuations. Nevertheless, in our view, it is important to have models in which cyclic activity arises as an inherent property of the equilibrium interaction between economic agents at the micro level. More specifically, we would like to know if it is possible that despite the absence of any shocks, a stationary environment exhibits a non-stationary time-path as a consequence of the dynamic strategic interaction between the economic actors.

Keywords: Nash Equilibrium; Reservation Price; Wage Distribution; Reservation Wage; Unemployed Worker (search for similar items in EconPapers)
Date: 1991
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Persistent link: https://EconPapers.repec.org/RePEc:pal:intecp:978-1-349-11570-9_6

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DOI: 10.1007/978-1-349-11570-9_6

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