Simultaneous Price-Quantity Adjustments in the Presence of Spillovers Across Markets

Thomas McCurdy and Demetrius Yannelis

No 275195, Queen's Institute for Economic Research Discussion Papers from Queen's University - Department of Economics

Abstract: Using a prototype non-market-clearing model, this paper analyses the implications of simultaneous output, price and wage adjustment at finite rates. Firms use a Marshallian-type output adjustment which utilizes available information about notional magnitudes. With this adjustment structure, the Walrasian equilibrium is shown to be globally stable. This result is compared with other formulations of the dynamics: such as, the usual structure which results in a continuum of non-Walrasian equilibria (along a boundary between regimes); and the formulation which excludes the forces of motion on the regime boundaries.

Keywords: Financial Economics; Marketing (search for similar items in EconPapers)
Pages: 37
Date: 1985-08
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Related works:
Working Paper: Simultaneous Price-Quantity Adjustment in the Presence of Spillovers Across Markets (1984)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:queddp:275195

DOI: 10.22004/ag.econ.275195

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